Bodily Injury Limit Exhaustion / Stowers Notice

This letter is issued when the damages in a third-party liability claim are likely to exceed the available policy limits. It serves to protect the interests of the insured while reserving the carrier's rights regarding excess exposure.

1. Introduction

Dear {{insured_name}},

This letter follows our recent investigation into the claim brought against you by {{claimant_name}} for injuries sustained in an incident occurring on {{date_of_loss}}. The purpose of this letter is to advise you that the damages claimed may exceed the coverage limits of your policy.

2. Factual Background

Our investigation indicates that {{claimant_name}} sustained significant injuries, including {{injury_description}}. Based on our evaluation of liability and damages, it is our assessment that the potential value of this claim could exceed your policy limit of {{policy_limit_per_person}} per person.

We have received a settlement demand from {{claimant_name}}'s attorney in the amount of {{settlement_demand_amount}}, which is {{demand_type}}.

3. Policy Language

Your policy, {{policy_number}}, provides the following limit for bodily injury liability:

Limit of Liability: {{policy_limit_per_person}} each person / {{policy_limit_per_occurrence}} each occurrence.

The policy further states: "Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgments or settlements."

4. Application

As stated above, the damages alleged by {{claimant_name}} may exceed your policy limits. If a judgment is rendered against you for an amount in excess of your policy limits, you may be personally responsible for the payment of that excess amount.

We will continue to handle this claim in good faith and will attempt to resolve it within your policy limits. However, we must advise you of your right to retain personal counsel, at your own expense, to represent your interests regarding any potential exposure in excess of your policy limits.

5. Next Steps

We will keep you informed of any further settlement negotiations or developments. If you decide to retain personal counsel, please have them contact us directly.

If you have any questions, please contact me at {{adjuster_phone}} or via email at {{adjuster_email}}.

Sincerely,

{{adjuster_name}} {{adjuster_title}} {{company_name}}