The Texas Supreme Court has further limited the "duty of good faith and fair dealing", ruling in a per curiam opinion issued October 18, 1996 that an insurer does not owe its insured a duty to investigate and defend claims against the insured by a third party. In Maryland Insurance Co. v Head Industrial Coating and Services, Inc., the state's highest civil court has said that Texas law recognizes only one tort duty in this context, that being the duty, first recognized by the Texas courts in 1929, to accept a reasonable settlement offer within the policy limits (known as the "Stowers Doctrine").
Duty of Good Faith Further Limited by Texas Supreme Court
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