If you were injured in an accident due to another individual or party’s negligence, you are entitled to demand compensation from the Defendant’s insurance company. However, because insurance companies are for-profit businesses, they often try to minimize their financial responsibility and offer you less than what you deserve, even when your damages are greater than the total available insurance policy. Fortunately, when this happens, Texas has laws that require insurance companies to pay for the full amount of the damages caused, not just what’s available in the Defendant’s insurance policy. Texas’s Stowers Doctrine allows the injured parties to collect the full extent of damages incurred, regardless of insurance policy limits.
The Stowers doctrine, named after a 1929 case, G.A. Stowers Furniture Co. v. American Indemnity, is a legal principle used in insurance claims that requires insurance companies to act in good faith when settling a claim. Here’s what this means in practice today:
The Stowers Doctrine Explained
Injured Plaintiffs sue Defendants to recover the injury damages caused by the Defendant. Auto Insurance policies are meant to protect the Defendant from paying out-of-pocket if they cause damage to someone else. In this case, it’s the insurer that negotiates and pays for the damages (up to the insurance policy limit), not the Defendant personally. If the damages are greater than what’s available in the insurance policy, the insurer and the Defendant need to make the decisions together, since the Defendant may be held personally responsible for anything above the insurance policy limit.
However, many insurance companies operate without ever consulting the Defendant, even when the damages are greater than the policy limits. These decisions by the insurance company may inadvertently expose the Defendant to a judgment without the Defendant ever knowing about it.
If this happens, and a jury finds that the Defendant was at fault and the damages to Plaintiff are greater than the insurance policy, the Defendant has a right to sue their own insurance company to force the insurance company to pay the full judgment to the Plaintiff, regardless of the limits of the insurance policy.
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How Does the Stowers Doctrine work in Practice?
The timeline of your Stowers personal injury case would look like this:
- Plaintiff incurs clear injury damages beyond the insurance policy limits.
- Plainitff’s lawyer sends a Stowers Demand Letter to the insurer, explaining the damages and demanding that the insurer pay only the policy limits.
- Defendant’s Insurance Company rejects the demand without the Defendant’s knowledge.
- Plaintiff goes to trial against the Defendant, and the jury awards a verdict above the policy limits.
- Defendant sues the insurer to force the insurer to pay the full verdict/judgment to Plaintiff.
Many Plaintiffs’ attorneys do not pursue these Stowers Doctrine cases, as they require considerable effort and often a full trial. Many attorneys would prefer to focus on other cases that settle more easily. Others may not know the full extent of the Stowers Doctrine, and what it could mean for their seriously injured clients.
How Do I Know if My Damages are Greater than the Insurance Policy?
Damages in a personal injury case can be thought of as economic or non-economic damages. Economic damages are those that you can calculate objectively: medical bills and lost income. Non-economic damages are more subjective: pain and suffering, physical impairment, and mental anguish.
Since non-economic damages are subjective, the best way to calculate the minimum damages you have is to look at the medical bills, including the estimates for any upcoming procedures or surgeries. If your past and future medical bills are greater than the policy limits, and the Defendant’s liability is clear, the insurance company should respond to your attorney’s Stowers Demand Letter by accepting and offering to pay the full policy limits.
If the insurance company rejects the demand, you likely have a Stowers Doctrine case, and after your trial, the insurance company should pay the full amount of the jury verdict and judgment.
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What is in a Stowers Policy Demand?
For a claim to involve the Stowers doctrine, the demand must meet all of the following requirements:
- Falls under the policy’s coverage
- Is within the policy limits
- Establishes terms that a reasonable insurer would accept
- Clearly states liability
- Offers the insurer a full, unconditional release from liability
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Fighting for Beyond Policy Limits
At Lone Star Injury Attorneys, we understand that insurance companies often give lowball offers to seriously injured Plaintiffs. Unlike many personal injury law firms that will eventually settle for the standard policy limits, our attorneys are not afraid to litigate the case to trial, receiving jury verdict far beyond the available policy limits.
Personal injury cases may be complex and require legal guidance to ensure an best settlement. Our team of aggressive legal professionals is committed to protecting your rights to recover for the full value of your injuries. We will walk every step with you through the legal process ensure your goals are met.. Although insurers may seem intimidating, our attorneys are determined to pursue maximum compensation, often achieving results beyond what other firms are able to achieve in a settlement.
If you believe your claim meets these criteria, speak with a knowledgeable personal injury lawyer today to fight for your entitled compensation.
Contact a Sugar Land Personal Injury Attorney for Help Understanding the Stowers Doctrine
After sustaining an injury in an accident due to someone else’s negligence, you should be focusing on recovering, leaving the legal work to your attorneys. Insurance companies will typically act against your best interests, attempting to offer an unreasonably low settlement offer, hoping you will take it without knowing the true value of your injury claim. Our experienced personal injury attorneys could help you receive a higher return from the insurance company, regardless of the insurance policy. They can vigorously advocate for your interests, fighting against even the most powerful insurance companies and ensuring you have a strong legal ally. Contact our office today to see how the Stowers doctrine could apply to your claim.
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