Applying Texas law, the federal district court found there was no coverage for damage to the insured’s commercial building due to the bursting of frozen pipes. Barona v. State Farm Lloyds, 2025 U.S. Dist. LEXIS 257379 (S.D. Texas Dec. 12, 2025).

Freezing weather froze Barona’s plumbing fixtures, causing significant water damage to the commercial property when the plumbing eventually expanded and burst. State Farm sent an inspector. During the inspection, Barona stated that he turned off the heat to his building but did not shut off the water supply or drain the pipes. State Farm denied covered based on the policy’s exclusion for frozen plumbing.

Barona’s counsel then demanded an appraisal to resolve any “dispute as to the amount of loss.” State Farm refused to participate in an appraisal, in part, because Barona had made repairs to the damage.

Barona sued for breach of contract and breach of the insurer’s duty of good faith and fair dealing. State Farm moved for summary judgment. The frozen plumbing exclusion had two exceptions. First, the policy stated that State Farm would cover any “Frozen Plumbing” damages if the insured did his “best to maintain heat in the building or structure. Second, the policy stated that State Farm would cover any “Frozen Plumbing” damages if the insured “drained the equipment and shut off the water supply if the heat is not maintained.”

Here, neither exception was met. Barona admitted that he intentionally turned off the heat to the building to perform repairs. He also admitted that he did not drain the equipment. State Farm had no contractual obligation to cover the damages.

Nor did State Farm breach the appraisal provision. The scope of the appraisal clause was limited to any dispute over the amount of damages – not determining whether State Farm should cover the property damage al all. There was no dipuste over the amount of damages.

Finally, State Farm did not breach the covenant of good faith and fair dealing. Under Texas law, when the issue of coverage was resolved in the insurer’s favor, extra-contractual claims did not survive.