Prepayment and Assignment Under the Texas Stowers Doctrine
Burnett, Bob D.
MetadataShow full item record
Discusses the Stowers Doctrine, which imposes upon an insurer a duty of ordinary or due care to the insured. This duty extends naturally to settlement negotiations, as an insurer who rejects an offer of settlement that was within the range of the policy may be liable to the insured if the judgement is rendered against them in excess of the policy. This is complicated by the prepayment rule, which disallows the payment of the excess judgement by the insurer until it is paid by the insurer, suffering a loss. The author discusses the interaction of these principles, and advocates for the containment of the prepayment rule to indemnity policies, and not liability policies.