One way that an insurance company can be forced to potentially cover your damages in excess of the policy limits is if you have an experienced attorney make a proper “Stowers demand” and the insurance company fails to respond properly. If the “Stowers demand” is made properly the insurance company has a duty to settle the third party claims against the insured when a reasonably prudent uninsured would settle.
So, what is a “Stowers demand”? There are three required elements in a “Stowers demand”: 1) that the demand be within the policy limits; 2) that it offer a complete release of the liability of the insured; and 3) that the insurer be given a reasonable amount of time to respond.
A “Stowers demand” is most powerful when you have a claim that is potentially over or near the policy limits. For instance, a typical auto policy is $30,000.00 for a one injured party accident. If the potential damages are over or near the $30,000.00 level then a proper “Stowers demand” is powerful. If reasonable, it should bring a third party insurance company to the table to settle. Otherwise, they potentially expose themselves to the full amount of damages awarded by a jury regardless of the policy limits.
A proper “Stowers demand” in the right situation is a powerful tool to get a case settled that might otherwise linger. The insurance company may decide that it is better to pay the policy limits now rather than pay in excess of the policy limits after a verdict.