extra-contractual claims against Farmers. B. Extra Contractual Claims A cause of action for breach of the duty of good faith and fair dealing is established when an insurer has no reasonable basis for denying or delaying payment of a claim, and the insurer knew or should have known that fact. Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 56 (Tex.1997) (citing Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 213 (Tex.1988)); Betco Scaffolds Co. v. Houston United Cas. Ins. Co., 29 S.W.3d 341, 348 (Tex.App.—Houston [14th Dist.] 2000, no pet.). When the underlying claim upon which an insured’s extra-contractual claims are premised is found to have been properly denied, however, his extra-contractual claims necessarily fail. Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341 (Tex.1995) (<HOLDING>); Tivoli Corp. v. Jewelers Mut. Ins. Co., 932
holding that no cause of action for bad faith exists when insurer has reasonable grounds to contest liability holding that under montana common law an insurer cannot be held liable for bad faith in denying a claim if the insurer had a reasonable basis for contesting the claim holding there can be no claim for bad faith when an insurer has promptly denied a claim that is in fact not covered holding insurer not liable for bad faith when it denied insureds claim based on a good faith dispute regarding the interpretation of a rule holding that a bad faith claim is a tort