The Stowers Demand in Texas

If you have been seriously injured in a motor vehicle accident, premise liability accident, construction accident, work related accident, or any other personal injury accident involving the negligence of another party, an effective and powerful tool to attempt to settle your claim with the negligent party's insurance carrier is called the "Stowers demand."  

The Texas Supreme Court in G.A. Stowers Furniture Co. vs. American Indemnity Co. held that an insured has a potential cause of action against its liability insurance carrier for failing to settle a liability claim when a demand is made within policy limits, liability is reasonably clear, and a reasonable insurance carrier should have settled the claim.

The Stowers demand works as follows:  the attorney for a personal injury claimant sends a settlement demand within policy limits, with supporting evidence to prove that liability is reasonably clear and that the injury claimant's damages exceed the policy limits, and then demands that the insurance carrier tender the full policy limits within a reasonable time limit.  If the insurance company refuses to settle the claim within the deadline, the attorney and his client can proceed to a jury trial.  If the jury awards an amount that exceeds the policy limits, the personal injury claimant can claim that the insurance carrier and insured are jointly and severally liable for the full amount of the jury award (as opposed to the insurance carrier's liability being limited to the amount of the policy limits on the insured's policy of insurance).

For example, assume that you are involved in an automobile accident in Corpus Christi, Texas, and your medical bills total $15,000.  You also lost work for a month with lost wages totaling $3,000.  In addition, you have a valid claim for non-economic damages such as pain and suffering and physical impairment.  The adverse driver who caused the car accident is insured for the State of Texas minimum coverage amount of $30,000.  You hire an attorney who collects your medical records and bills and sends a demand letter to the third party insurance carrier to try to settle your case and the insurance carrier for the adverse driver only offers $15,000 in total to settle your case.

You now have one of two options.  You can accept the offer and not recover a fair amount for your damages, or you can file suit and prepare your case for trial.  A Stowers demand at this point is a powerful and effective tool to either settle your case; or alternatively, provide to you a chance to recover more than the amount of insurance coverage providing coverage to the negligent party.  Your attorney should send the Stowers demand letter to the insurance carrier, which must contain specific language, to place pressure on the carrier to tender the policy limit of $30,000, or risk owing a higher amount if a jury awards an amount greater than the policy limit.

One of two things will occur - either the insurance carrier will tender the policy limit and you will have collected as much as the negligent party was insured for, or the insurance carrier will refuse and you have the chance to collect whatever amount a Texas jury decides is fair in your case, regardless of the amount that the negligent party was insured for.

Whether your personal injury case is one in which a Stowers demand should be utilized is a decision that must be discussed between you and your attorney.  The best decision you can make is to hire an experienced personal injury attorney who possesses the knowledge to use all weapons at his disposal to aggressively represent you with honesty and integrity.