What is a Stowers Demand?

Last updated on: February 26, 2012


What is a Stowers demand?

Stowers Furniture Company vs. American Indemnity is a case that’s over 80 years old, and it’s still good law today. In essence, it’s the guideline that governs liability policies. Stowers concerns the duty an insurer has to exercise reasonable care in handing claims against an insured.

What was the Stowers case about?

In the Stowers Furniture case, there was a furniture truck that was involved in a motor vehicle collision. The injured party suffered medical bills, and Stowers Furniture was insured by American Indemnity (they had policy coverage of up to $5,000). Well, when the injured party made a demand within those policy limits, the insurance company declined the offer and the case went to trial. At trial, the jury awarded more than twice the policy limits. Stowers then sued their insurance company claiming that they negligently rejected a demand within policy limits, and as a result were on the hook for the additional monies in excess of $5,000.00 when they shouldn’t have been had American Indemnity acted like a prudent insurer. The court agreed and created the doctrine we all know now as the Stowers doctrine, which creates liability on the insurer only if they negligently reject a demand within policy limits that fulfills the requirements of Stowers.

What are the Stowers requirements?

First, you must be within the scope of the coverage. Secondly, the demand must be within the policy limits available and must release the insured fully. Lastly, Stowers requires that a prudent and ordinary insurance company would have accepted the demand.

Stowers demands are often a great way to put pressure on an insurance company in an attempt to settle the case reasonably within policy limits. However, our attorneys are very experienced with Stowers demands, and if you, a friend, or a loved one have been involved in a car accident, motorcycle accident, truck accident, product injury, or any other injury incident please call the lawyers at Zinda Law Group in order to get a free evaluation and discuss your potential legal rights.