A Stowers demand is a settlement offer within the at-fault driver's policy limits that, if the insurer unreasonably refuses it, can make the insurer responsible for a later judgment above those limits. It is one of the strongest tools an injured person has in a Texas claim with limited coverage.
The name comes from a 1929 Texas decision, G.A. Stowers Furniture Co. v. American Indemnity Co., which held that an insurer controlling the defense must act like a prudent person in handling a settlement offer within its policy limits. If it refuses a reasonable offer and a jury later awards more than the policy, the insurer can be liable for the excess.
Texas courts have made the requirements specific. The Texas Supreme Court in American Physicians Insurance Exchange v. Garcia (1994) described three elements: the claim must be within the scope of coverage, the demand must be within the policy limits, and its terms must be such that an ordinarily prudent insurer would accept it, considering the likelihood and size of a potential excess judgment. Courts have also required the offer to release the insured fully.
This matters most when the injuries are serious and the coverage is thin. Texas requires only $30,000 per person in liability coverage under Transportation Code section 601.072. When a claim plainly exceeds the limits, a properly built demand gives the insurer a clear choice: pay the limits now or risk paying more later.
The demand has to be supported. It should include the medical records and bills, proof of lost earnings, the evidence on fault, and enough time to evaluate. A demand that is vague, that adds conditions beyond a release of the insured, or that gives the insurer no real chance to investigate is easy to attack later.
A Stowers demand is also a step toward the full picture of coverage. It often comes after the firm has identified every other policy, including your own uninsured motorist coverage for the gap. Owsley Law Firm prepares these demands for serious injury claims and charges no fee unless it wins.
The doctrine protects the insured driver, not just the injured person. An insurer that gambles with its customer's money by refusing a reasonable offer within limits risks paying the excess itself. That incentive is what gives a well-built demand its force.
A demand that includes extra conditions, such as releases of other parties or confidentiality the insured cannot provide, may not qualify. Clear, unconditional terms and a reasonable time to respond matter.
Stowers demands are most useful early in serious cases with modest limits. Where the at-fault driver has a large commercial policy, the strategy usually turns more on building the full damages case.
Mistakes that cost people money
- Sending a demand without the medical records and bills that justify the limits.
- Giving the insurer too little time to evaluate the claim.
- Adding conditions beyond a release of the insured.
Related questions
Does a Stowers demand force the insurer to pay?
No. It gives the insurer a choice. If it unreasonably refuses and a later judgment exceeds the limits, the insurer can be responsible for the excess.
Do I need a lawyer to make one?
The requirements are technical, and a defective demand can be ignored without consequence. Most are prepared by counsel.
What if the driver has more than one policy?
Every policy that covers the driver should be identified before a limits demand is made, so the demand covers the full coverage picture.
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