Stowers Demand in Texas: Stowers Doctrine Explained [2025]

If you’ve been injured in an accident in Texas due to another person’s negligence, you have the right to be fully compensated for your medical bills, property damage, lost wages, and other costs. But what if the other party and their insurance company do not want to pay up?

Enter the Stowers Demand.

The Stowers Demand is a powerful legal tool that Texas personal injury lawyers use to pressure insurance companies to offer reasonable settlement payments to victims. This time-sensitive demand letter is sent to the insurance company informing them of their responsibility to make a reasonable settlement offer – or face legal action – ie, a lawsuit.

In this article, the personal injury lawyers at Varghese Summersett Injury Law Group explain the Stowers Doctrine in Texas and how this tool may help you get the just compensation you deserve.

What is the Stowers Doctrine in Texas?

The Stowers Doctrine is a legal principle that originated in Texas. In essence, it requires an insurance company to act in good faith when handling a settlement demand from an injured party. If the insurance company fails to do so and the case proceeds to trial, the insurance company can be held liable for any damages in excess of the policy limits.

For example, let’s say you were injured in a car accident, and the at-fault driver’s insurance policy has a limit of $50,000. If you make a settlement demand for $50,000, and the insurance company rejects it without a reasonable basis, they may be liable for any damages awarded at a subsequent trial that exceed $50,000. So, if a jury awards you $75,000 in damages, the insurance company may have to pay the full $75,000, even though it’s more than their policy limit.

Why is it Called a “Stowers” Demand?

Stowers Demands are named after a 1929 case, G.A. Stowers Furniture Co. v. American Indemnity, in which the Texas Supreme Court held that an insurance company could be held liable for an excess judgment if it refused to settle a case within its policy limits when it could have done so.

What is the Purpose of a Stowers demand?

The purpose of a Stowers Demand is to settle a case for the policy limits of the insurance policy, and to hold the insurance company liable for an excess judgment if it refuses to settle the case within its policy limits when it could have done so.

How Does a Stowers Demand Work?

Under the Stowers Doctrine, an injured party or their attorney must make a settlement demand that is within the insurance policy limits. The demand letter must be clear, specific, and unambiguous. If the insurance company receives a valid settlement demand that complies with the necessary requirements, they have a duty to respond in good faith. This means they must conduct a reasonable investigation into the claim, evaluate the demand, and either accept it or reject it for a valid reason.

If the insurance company rejects a valid settlement demand without a reasonable basis, and the case proceeds to trial, it can be held liable for any damages in excess of the policy limits. This includes not only the amount of damages awarded by the jury but also any costs and attorney’s fees incurred by the injured party in pursuing the claim.

When Should You Make a Stowers Demand?

A Stowers demand can be made at any time during the claims process, but it is typically made after the injured party has undergone medical treatment and has a clear understanding of their injuries, the medical costs associated with them, the long-term ramifications, and any other losses they have suffered. It is important to make a Stowers Demand before the statute of limitations expires, which is typically two years from the date of the accident in Texas.

What Should Be Included in a Stowers Demand?

For a Stowers demand to be valid, it must meet certain requirements including:

• The settlement demand is within the policy limits;

• Liability is reasonably clear;

• The settlement terms are such that a reasonable insurer would accept the offer;

• The demand must be unconditional; and

• The demand must offer a full and final release.

The demand packet will also include evidence of the injury and damages, such as pictures, police reports, medical bills, etc. Additionally, the demand will include a deadline for the insurer to respond. If the insurance company refuses to settle after Stowers Demand, they can expect a lawsuit.

Stowers Demand Example

Below is an example of a basic Stowers Demand.

[Date]

Via Certified Mail, Return Receipt Requested
[Claims Adjuster’s Name]
[Insurance Company Name]
[Insurance Company Address]
[City, State, ZIP Code]

Re: Stowers Demand for Full Policy Limits

Claim Number: [Claim #]
Insured: [Defendant’s Name]
Claimant: [Plaintiff’s Name]
Date of Loss: [Date of Accident]

Dear [Claims Adjuster’s Name],

This letter serves as a formal Stowers demand on behalf of my client, [Plaintiff’s Name], in connection with the [date of accident] automobile collision caused by your insured, [Defendant’s Name]. As detailed below, the evidence overwhelmingly establishes that your insured is fully liable for the injuries and damages sustained by my client, and my client is prepared to settle this case within your insured’s policy limits.

Liability is Clear

Your insured, [Defendant’s Name], was cited for [violation, e.g., running a red light, speeding, failure to yield], resulting in a severe collision with my client’s vehicle. The police report, eyewitness statements, and physical evidence confirm that your insured was 100% at fault. There is no reasonable dispute regarding liability.

Damages and Injuries

As a result of your insured’s negligence, my client suffered significant bodily injuries, including but not limited to:

• [List major injuries, e.g., “Traumatic brain injury,” “Multiple fractures requiring surgery,” “Herniated discs”]
• [Total medical expenses: $XX,XXX.XX]
• [Lost wages: $XX,XXX.XX]
• [Pain and suffering: significant and ongoing]

Medical records from [list medical providers] confirm the severity and permanency of my client’s injuries. Given the substantial damages incurred, my client’s case is well in excess of your insured’s policy limits of $[Policy Limits].

Settlement Demand Under Stowers Doctrine

Given the clear liability and extensive damages, we are willing to settle all claims against your insured for the full policy limits of $[Policy Limits]. This offer is made in good faith and represents a reasonable settlement under Texas law. Failure to settle within policy limits may expose your insured to personal liability beyond coverage limits.

Time-Sensitive Offer

This demand is open for [30 days] from the date of this letter. If we do not receive written confirmation of acceptance within this period, this offer will be withdrawn, and we will proceed with litigation. If a jury returns a verdict in excess of the policy limits, we will hold your company responsible under the Stowers doctrine for failing to settle within reasonable limits when given the opportunity.

Conclusion

We urge you to carefully consider this demand and act in the best interests of your insured. Please forward this letter to your insured immediately, as failure to do so may create further exposure for your company. If you have any questions or require additional documentation, please contact me at [Phone Number] or [Email].

Sincerely,

[Attorney’s Name]
[Law Firm Name]
[Address]
[City, State, ZIP]
[Phone Number]
[Email]

Can You Make a Stowers Demand on Your Own?

Technically, you can make a Stowers Demand on your own without an attorney, but it is not recommended. A Stowers Demand is a legal document, and making mistakes or leaving out important information could negatively impact your case. It is important to have an experienced personal injury attorney draft and send the Stowers Demand packet on your behalf. The experienced attorneys at Varghese Summersett can build a strong Stowers Demand packet that accurately documents your claim, making sure you get the compensation you deserve.

Why is the Stowers Demand an Effective Tool?’

By sending a Stowers Demand, a plaintiff’s attorney can put pressure on the insurer to settle the claim within policy limits, and can potentially create an incentive for the insurer to do so. If the insurer fails to settle within policy limits, the plaintiff may be able to recover damages in excess of the policy limits, which can be a significant increase in recovery.

What Happens If the Insurer Accepts the Stowers Demand?

If the insurer accepts a Stowers Demand, it means that they have agreed to settle the plaintiff’s claim within policy limits. This typically means that the case will be resolved once the insurer pays the agreed-upon amount.

Once the payment is made, the plaintiff agrees to release the defendant and the insurer from any further liability related to the claim. This means that the plaintiff cannot pursue any additional claims against the defendant or the insurer related to the same incident.

Overall, if the insurer accepts a Stowers Demand, it can be a positive outcome for both the plaintiff and the defendant. The plaintiff is able to recover damages for their injuries, and the defendant is able to avoid the risk of a judgment that exceeds the policy limits.

How Long Does the Insurance Company Have to Pay?

The insurance company usually has a certain amount of time to make the payment to the plaintiff.  In practice, insurance companies in Texas typically aim to pay out settlements within 30 to 45 days of reaching an agreement. However, the actual timeframe can vary depending on the complexity of the claim, the amount of the settlement, and the insurance company’s internal processes and procedures.

What Happens if the Insurer Rejects the Stowers Demand?

If the insurer rejects a Stowers Demand, it means that they have chosen not to settle the plaintiff’s claim within policy limits. This can result in a number of different outcomes, but legal action is generally the next step.

The plaintiff likely will choose to file a lawsuit and, if successful in court, the insurer may be held liable for damages that exceed the policy limits. This means that the insurer would be responsible for paying the full amount of the judgment.

If the plaintiff is unsuccessful in court, or if the judgment is within the policy limits, the insurer will be required to pay the plaintiff the amount of the judgment, up to the maximum amount specified in the policy.

If the insurer rejects the Stowers Demand and the plaintiff decides to pursue the case in court, the insurer may be required to pay additional costs associated with the litigation, such as legal fees and court costs. These costs can be significant, especially if the case goes to trial.

Rejecting a Stowers Demand can lead to a more complex and potentially costly legal process for both the plaintiff and the defendant. It’s important to work with an experienced attorney who can help guide you through the process and ensure that your rights are protected.

Injured in an Accident? Contact Us.

The Stowers Doctrine is an important legal principle in Texas that allows injured parties to receive just compensation for their injuries. If you believe your case may qualify for Stowers Demand, contact Varghese Summersett to schedule a free consultation with an experienced personal injury attorney.

We have vast experience handling Stowers Demands and will work diligently to ensure you receive every penny you deserve. If we can’t do that with a Stowers Demand, we are prepared to file a lawsuit and take your case to trial if necessary. You didn’t ask to be put in this position, and you shouldn’t should this burden alone.

Best of all, we work on contingency, which means we only get paid if you get paid. It won’t cost you anything out of pocket to hire our team, which handles personal injury and wrongful death cases in North Texas.

 Call 817-207-4878 (HURT) today and let us get to work for you