Understanding the Stowers Rule in Texas Personal Injury Cases

If you've ever dealt with a personal injury case in Texas, you may have heard about the Stowers rule. This rule can be very important in personal injury cases, as it can impact the amount of compensation you are able to recover. In this blog post, we will explain what the Stowers rule is and how it can affect your personal injury case.

What is the Stowers Rule?

The Stowers rule is a legal principle that requires an insurance company to act in good faith when negotiating a settlement in a personal injury case. Under this rule, if an insurance company rejects a settlement offer that is within the policy limits and a jury later awards the injured party an amount that is greater than the policy limits, the insurance company may be liable for the entire amount of the jury award.

The Stowers rule is named after a Texas Supreme Court case, G.A. Stowers Furniture Co. v. American Indemnity Co., which established the rule in 1929. In this case, the court found that an insurance company had a duty to its insured to act in good faith and settle claims within policy limits.

How Does the Stowers Rule Affect My Personal Injury Case?

The Stowers rule can have a significant impact on your personal injury case if you have been injured due to someone else's negligence. If the negligent party is insured, their insurance company will typically be responsible for compensating you for your injuries.

If you make a settlement offer within the policy limits and the insurance company rejects it, they may be taking a significant risk. If the jury later awards you an amount greater than the policy limits, the insurance company may be liable for the entire amount of the award.

This means that if you make a reasonable settlement offer within the policy limits and the insurance company rejects it, they may be acting in bad faith. If this is the case, your personal injury attorney may be able to argue that the insurance company is liable for the entire amount of the jury award, rather than just the policy limits.

How Can I Use the Stowers Rule to My Advantage?

If you have been injured in a personal injury case and the negligent party is insured, it's important to understand the Stowers rule and how it can impact your case. Your personal injury attorney can help you make a settlement offer within the policy limits and negotiate with the insurance company to try to reach a fair settlement.

If the insurance company rejects your settlement offer and a jury later awards you an amount greater than the policy limits, your attorney may be able to argue that the insurance company acted in bad faith and is liable for the entire amount of the award.

It's important to note that the Stowers rule only applies to cases where the insurance policy limit is less than the amount awarded by the jury. If the policy limit is greater than the amount awarded, the insurance company will only be responsible for paying up to the policy limit.

In Conclusion

The Stowers rule is an important legal principle in Texas personal injury cases. It can have a significant impact on the amount of compensation you are able to recover if you have been injured due to someone else's negligence. Understanding how the Stowers rule works and how it can impact your case is essential if you want to receive fair compensation for your injuries.

If you have been injured in a personal injury case and need help navigating the legal process, don't hesitate to contact an experienced personal injury attorney for guidance. They can help you understand the Stowers rule and how it applies to your case, negotiate with insurance companies, and represent you in court if necessary.