What is the Soriano doctrine?

The Soriano doctrine is one of the most important — and often misunderstood — rules in Texas personal injury law. It was established by the Texas Supreme Court in Texas Farmers Insurance Co. v. Soriano, 881 S.W.2d 312 (Tex. 1994), and it drastically affects how insurance settlements are handled when multiple people are injured in the same accident. Under this rule, an insurance company does not act in bad faith or incur any additional liability simply because it chooses to settle one person’s claim, even if that settlement uses up all or most of the available insurance funds. In other words, insurers are legally allowed to resolve one claimant’s case for the policy limits — leaving nothing for anyone else — so long as that settlement was reasonable and made in good faith.

This principle is often called the “first come, first served” rule. To understand how it works, consider a typical Texas auto insurance policy with 30/60 limits, which is the minimum allowed by Texas law. The “30” represents the maximum amount the insurer will pay per person for bodily injuries — $30,000 — and the “60” represents the maximum they’ll pay per accident, regardless of how many people were hurt — $60,000 total. So, if one person is injured, the most they can recover from the at-fault driver’s insurance is $30,000. But if three people are injured in the same crash, they must all share the $60,000 total limit.

Here’s where the Soriano doctrine becomes critical: the insurance company can settle with the first one or two claimants who present strong cases and exhaust the $60,000, even if other victims haven’t yet made their claims. Those later claimants may then find there’s no money left to pay for their injuries, no matter how severe they are. The insurer has no legal obligation to hold back funds to distribute fairly among all victims — only to make reasonable settlements as they see fit.

This can be devastating in multi-car or chain-reaction collisions, where five, ten, or even more people may be injured. Once the insurer pays the policy limits, its obligation to everyone else ends, leaving late claimants to pursue the at-fault driver personally — who usually has few assets beyond the now-exhausted insurance policy. Higher policy limits, like 50/100 or 100/300, may help in some cases, but the rule remains the same: once the insurer pays out the policy limits reasonably, it’s done.

The Soriano doctrine highlights why it is so important to act quickly after an accident. If you wait too long to make your claim or hire a lawyer, you could lose your ability to recover anything — even if your injuries are far worse than those of others who settled earlier. An experienced personal injury attorney can immediately notify insurers, secure your claim, and ensure that your rights are protected before limited insurance funds disappear.