When you’re injured in an accident, the goal is simple: get a fair settlement without years of court battles. But insurance companies sometimes take risks and refuse to settle, even when they could pay within the policy limits.
In Texas, the Stowers Doctrine helps force an insurance company to act fairly. If the insurer controls the case, it must handle settlement offers in a careful and reasonable way. If it turns down a fair offer within the policy limits and a jury later awards more, the insurer may have to pay the extra amount.
Stowers Doctrine Is Settled Legal Precedent Reaching Back to 1929
The Stowers Doctrine comes from a 1929 case called G.A. Stowers Furniture Co. v. American Indem. Co. It can let a plaintiff seek money above the insurance policy limits when the evidence supports it. It can also help defendants by putting the responsibility on the insurance company instead of the person.
When you file a personal injury lawsuit against someone else, your lawyer will usually go after their insurance company. The insurance company can often pay more than the person can. But insurance companies may still delay settlement, even when they could settle within the policy limits.
The Stowers Doctrine can put the responsibility on the insurance company instead of the injured person.
Using a Stowers Demand to Force an Insurer to Settle — What It Looks Like
Suppose you are in a car accident and the other driver is mostly at fault for your injuries and vehicle damage. Under Texas insurance law, you can file a claim against their policy to seek compensation. You and your lawyer can try to settle for the full cost of your losses, but if the insurance company will not pay, the case may go to trial.
The Stowers Doctrine allows you to demand payment from the insurer under these criteria:
- The insured party is financially liable: You must show the at-fault person caused the crash, using evidence.
- Your demand must be within the insured’s policy limits: You cannot ask for more than the policy allows during settlement talks. But if the case goes to trial and the jury awards more, you may still recover more money.
- You clearly explain why your demand is fair: Under the Stowers Doctrine, a careful insurance company would accept the amount.
- Your demand is unconditional: You cannot add extra rules or requirements to the offer.
- Your demand fully releases the insured from liability: The offer must protect the insured person from paying their own money. This puts the responsibility on the insurance company.
The final point can also help the defendant if the insurer chooses to go to trial. If the insurer refuses a fair settlement and the jury gives more than the policy limits, the insurance company may have to pay the extra.
Why the Stowers Doctrine Benefits You as a Plaintiff
Your lawyer’s job is to get fair money for your medical bills, property damage, lost income, and other costs caused by the at-fault party. Ideally, the insurance company will agree to a settlement to pay your bills and help you get your life back on track. If they downplay your injuries or delay talks without a good reason, the Stowers Doctrine can help your lawyer force a solution.
Usually, an insurer can control a one-on-one talk with your personal injury lawyer better than a jury trial. But if they refuse a fair offer within the policy limits, your attorney can send a Stowers demand letter to remind them of their legal duty.
If the company refuses your offer and does not pay your claim, they must pay any amount over the policy limits that a court awards. This helps you as a plaintiff because you won’t have to try to collect the money from the individual driver, who might not have enough funds to pay.
If an insurance company downplays your injuries or delays talks without reason, the Stowers Doctrine can help your lawyer force a solution.
The Stowers Doctrine Can Lead to a Bad Faith Claim Against the Insurance Company
The Independent Insurance Agents of Texas says insurers must act fairly with claimants. The Stowers Doctrine applies if your settlement offer is one a reasonable insurer would accept, knowing they could have to pay more at trial.
If you use the Doctrine and the jury gives more than the policy limits, you might be able to sue the insurer for acting in bad faith.
What Counts as Bad Faith Action?
- Unreasonably delaying payment on a valid claim
- Misrepresenting policy details or insurance law
- Offering significantly inadequate settlements
- Denying a claim without a valid reason
- Refusing to investigate the claim correctly or at all
- Violating the Texas Unfair Claim Settlement Practices Act
You and your attorney should document all conversations and communications with the insurance provider, matching their actions against the Texas Insurance Code Chapter 33 regarding standards of conduct.
Push Insurance Companies to Pay with a Stowers Doctrine Letter
Texas law gives several tools to encourage an insurer to act. The Texas Insurance Code (mainly Chapter 542) sets deadlines for how quickly insurers must respond to and decide certain claims, usually in first-party cases. If they miss these deadlines, your lawyer can seek legal remedies.
A Stowers demand is different: it’s a strategic settlement offer within policy limits. If an insurer unreasonably refuses it, they could be liable for amounts over the policy after a trial. Prompt-payment rules cover timing, while a Stowers demand focuses on reasonableness and leverage in a liability case.
Next Steps
If the insurance company stalls or gives weak reasons to deny your claim, contact The Krist Law Firm for a free consultation. We will review your case and guide you on the next steps to get the compensation you deserve.
