Texas Stowers Policy-Limits Demand Checklist & Validity Analyzer
Governing Texas Statutory Formula: Stowers Doctrine & CPRC Ch. 541
Audit whether a Texas policy-limits settlement demand satisfies every mandatory prerequisite of G.A. Stowers Furniture Co. v. American Indemnity Co. and American Physicians Insurance Exchange v. Garcia—including unconditional full release, hospital/Medicare lien indemnification, and reasonable deadline—to expose the insurer to uncapped excess judgment liability.
Interactive Stowers Demand Checklist Generator
The 5 Non-Negotiable Elements of an Bulletproof Texas Stowers Demand
Under Texas law, a liability insurance company's duty to settle (and its exposure for the full excess jury verdict if it refuses) is NOT triggered unless the claimant serves a legally valid 'Stowers Demand.' Defense appellate lawyers routinely defeat defective Stowers demands by pointing to a missing element under American Physicians Insurance Exchange v. Garcia, 876 S.W.2d 842 (Tex. 1994).
To be enforceable under Texas precedent, a Stowers demand must: (1) demand an amount that is unconditionally within the remaining available policy limits; (2) offer a complete, unconditional release of all insureds (both the named insured and permissive driver/employer) for all claims covered by the policy; (3) explicitly agree to satisfy and indemnify the insureds and insurer against all statutory hospital liens (Tex. Prop. Code Ch. 55), Medicare/Medicaid claims, and workers' comp liens out of the settlement proceeds; (4) attach sufficient medical bills (compliant with CPRC § 41.0105) and liability records that an ordinarily prudent insurer would accept; and (5) provide a clear, reasonable time deadline for acceptance.
Frequently Asked Questions Under Texas Law
Does a Stowers demand work if there are multiple injured claimants competing for a single Texas policy limit?
Yes. Under Texas Farmers Insurance Co. v. Soriano, 881 S.W.2d 312 (Tex. 1994), a Texas insurer faced with multiple claimants and insufficient policy limits may settle reasonable claims on a first-come, first-served basis without incurring bad-faith liability to the remaining claimants—creating an urgent race to serve the first complete Stowers demand!
Can a Stowers demand require the defendant to also release counterclaims or pay costs above policy limits?
Be careful: demanding payment of court costs or expenses in addition to the policy limit (unless the policy's supplementary payments clause covers them separately) can render the demand 'above policy limits' and void Stowers protection under Garcia.
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