# The Stowers Doctrine — Insurer Bad Faith in Texas

The Stowers doctrine makes a liability insurer responsible for the entire judgment — even the part above the policy limits — when it unreasonably refuses a settlement demand within those limits that an ordinarily prudent insurer would have accepted. It is the main tool for holding insurers accountable when they gamble with a policyholder's exposure.

When an insurer plays hardball on a clearly valid claim, the Stowers doctrine shifts the risk of that gamble back onto the insurer.

## The rule

From G.A. Stowers Furniture Co. v. American Indemnity Co. (Tex. 1929): a liability insurer has a duty to accept a reasonable settlement demand within policy limits when an ordinarily prudent insurer would do so. If it unreasonably refuses and the case later results in a judgment above the limits, the insurer is liable for the **entire excess** — not just the policy amount.

## Why it shapes negotiations

A valid "Stowers demand" — a within-limits settlement offer that meets the doctrine's requirements — forces the insurer to choose between settling and exposing itself to the full verdict. Framed correctly, it changes how seriously an insurer treats the claim.

Structuring a Stowers demand so it actually triggers the doctrine is precise work. A [Texas injury lawyer](/texas/) sets it up when the facts support it.

## Frequently Asked Questions

### What is a Stowers demand?

It is a settlement demand within the at-fault party's policy limits that, if reasonable, the insurer must accept. If the insurer unreasonably rejects it and a jury later returns a verdict above the limits, the insurer can be liable for the entire excess under the Stowers doctrine.

### Why does the Stowers doctrine matter to an injured person?

It pressures insurers to settle reasonable claims within limits rather than risk paying the full verdict. A properly framed Stowers demand can change how an insurer values your case.