Insurance adjusters and their attorneys should demand examinations under oath on a timely basis. Prompt adjustment requires it. However, the current technique and growing practice by many insurers is to request an examination months and even years after the loss. Sometimes, the demands are made after suit has been filed. This is a wrongful delay tactic that needs to stop.
Examinations under oath are often not needed if the insurance company has only non-fraudulent concerns. Discussion and exchange of information is far quicker and much more in depth than the typical questions and answers in most examinations under oath. Insurance adjusters, claims managers and their attorneys must know must know this, so the only real reason for examinations under oath is to help the insurance company attorneys make final coverage suggestions before their claims managers make the decision.
Corey Harris wrote an excellent piece in When Can An Insurer Require An Examination Under Oath? Readers should note that this post involves Florida law and many states have different case law, regulations and statutes that may apply. Most regulations and statutes require insurers to quickly invoke examination requests or lose the right. United Policyholders remarked in Examinations Under Oath on the various consumer protections regulations and statutes that are needed to keep insurers acting in good faith:
Companies use this procedure to screen out fraudulent claims and test a policyholder’s credibility and/or evaluate what kind of a witness he or she will make if a claim or coverage dispute goes into litigation. The EUO procedure was abused by insurers after past disasters to intimidate and frighten policyholders. So United Policyholders helped pass legislation in California to stop the abuses and protect policyholders. (empahsis added) But the EUO procedure is still a legal and valid requirement in homeowners policies, and the law in most states is vague on the subject. A homeowner who makes a claim for policy benefits must cooperate when an insurer makes a reasonable request to examine them under oath or risk losing the right to recover the funds they’re entitled to. Courts have traditionally been hard on policyholders who refused to cooperate in EUOs.
In California and in most states there are “Fair Claim Handling Regulations”, and there are laws that tell insurers what they must, can and cannot do. Above all, your insurance company has the legal duty to investigate and process your claim fully, promptly and in good faith and deal with you fairly.
Florida and other states in the Southeast need more consumer protections to prevent and discourage the delays that routinely occur when some insurers’ investigations seem to last forever and do not lead to a claims decision, but further excuses for more delay— usually the excuses of needing and analyzing more information. Some insurers are trying to avoid this by re-writing policies with increasing and detailed conditions precedent.
Nevertheless, Corey Harris correctly notes the general majority rule: Examinations Under Oath should be demanded timely, before payment or denial, and definitely before a properly filed lawsuit where the insurer had not reqested an examination. His discussion gets to the heart of the matter:
…the Court ruled that because the insurer had requested the examination under oath prior to the lawsuit, the examination under oath was a condition precedent to filing suit. Therefore, the Court determined that the insured had breached the contract and was not entitled to payment under the policy.
A much different scenario exists when the insurer does not request an examination under oath prior to the lawsuit being filed. This situation arose in Willis v. Bankers Insurance Company, 736 So.2d 1272 (Fla. 4th DCA 1999). In Willis, the Court distinguished the facts in Goldman because of the time when the examination under oath was requested. Since the insurer did not request the examination under oath until after the suit was filed, the court held that the examination under oath was not a condition precedent to filing suit. Therefore, the insured in Willis did not breach the contract by refusing to sit for the examination under oath.
In The Mind Of The Insurance Fraud Adjuster And Investigator, I made the following remarks:
Some may question why I spend time studying the insurance company’s perspective. From my viewpoint, even a broken clock is right twice a day. And, I need to understand the mind of my opponent and anticipate his actions to do a better job for my clients.
Guy "Sandy" Burnette invited me to speak at the International Association of Special Investigation Units over a decade ago. I was the token insurance attorney for policyholders. During my presentation, I cautioned that the two major human problems facing fraud investigators would be the issue of wrongly accusing innocent people of fraud and the tendency of some in an investigative role to view everybody as a potential crook. Well meaning or not, seventeenth century witch hunts can be repeated by modern groups. If all you concentrate upon in life is uncovering fraud, you may start seeing signs of it everywhere.
When I get called about possibly working on a case where a claim is dragging along and a possibility of an examination exists, getting the insurance company to act promptly and in good faith becomes paramount. Asking who opposes the claim, why the claim has not been paid, whether there is any concern about fraud and, if so, what those fraudulent issues are, and demanding that information be exchanged informally or through a prompt examination under oath moves the matter along. These demands should be made politely and cooperatively, trying to get payment while still pointing out the seriousness of not having a prompt adjustment.