As to the bad faith claim, because the court concluded “that the maintenance exclusion was properly applied, [the insurer] by definition had a reasonable basis to deny [the] claim.” The court cited its prior decision in Frog, Switch & Mfg. Co. v. Travelers Ins. Co., 193 F.3d 742, 751 n.9 (3d Cir. 1999), to support this principle.
The court then noted that “even if viewed as a distinct claim that requires us to consider only the facts [the insurer] knew at the time of the coverage determination to evaluate its subjective intent, the experts’ reports detailing the condition of [the] furnace coupled with the frozen condition of the home, [the insured’s] failure to ‘winterize’ his home, and [the insured’s] characterization of the incident as a ‘water-freeze’ to his public adjuster provided more than a reasonable basis for [the insurer] to deny coverage.”