“The insurance company is demanding that I sit for an EUO! Can they do that?” This is a question I hear often from Public Adjusters and others who would otherwise not be involved in the insurance dispute. To find the answer, we need to look no further than the policy itself….
Prudential Property vs. Swindal, 622 So. 2d 467 (Fla. 1993), is a Florida Supreme Court case in which the Court held that policies are read by their plain language, with undefined terms and words given their plain everyday meaning. In Koikos vs. Travelers Ins., 849 So. 2d 263 (Fla. 2003), the Florida Supreme Court added the phrase, “plain everyday meaning as would be understood by an ordinary person.” Further, in Excelsior Ins. v. Pompano Park, 369 So. 2d 938 (Fla. 1979), the Court also stated that courts may not write terms and conditions into policies that do not exist in the plain language.
These cases may be Florida-centric, but you’ll find counterparts to these cases in just about every state in the country. Insurance policies are contracts, and it is standard in the United States that contracts are read by their plain and everyday language. “Blue-penciling,” legal jargon for courts crossing out or writing in language in a contract, is almost universally disfavored. As such, the plain policy language controls its terms and conditions, including post-loss obligations and EUO clauses.
I know that reading policy language can be boring and tedious, but it is the most important thing to do – especially as it relates to who is required to sit for an EUO. There is a plethora of useful information in the text, and it is amazing how many times insurance companies demand actions which are beyond the language of their policies.
Most residential policies say something along the lines of: “You must sit for an examination under oath at our request outside the presence of any other insured, and sign the same.” The definition section of most residential policies defines “you” as, “Any named insured and the spouse of any named insured residing at the resident premises.” That’s pretty clear. If the policy has this language, or a reasonable facsimile thereof, only the named insured and the spouse of a named insured living at the insured residence may be forced by the insurer to submit to an EUO. No sons, no daughters, no aunts, no uncles, no public adjusters, not your friend Eddie who dropped the pan-full of water on the floor and chipped the tile: just the named insured and spouse of the named insured residing at the residence premises. Period.
However, some policies are a little trickier. I’ve seen State Farm residential policies which say that if the policyholder is going to rely on or defer to employee’s or expert’s opinions, the policyholder must assist the insurer in producing those employees or experts for EUO as well. Thus, if the insured is going to point to their public adjuster and/or the estimate produced when questioned about damage or valuation of damage, the public adjuster would have answer questions under oath. Of course, in this scenario, I argue that under the policy’s plain language, the PA need only answer questions in the area(s) in which the policyholder has deferred to the PA. Further, since the PA is not an insured, the insurer has no right to demand that the insured and PA be separated for questioning. This usually drives defense attorneys crazy, but I tell them, “YOUR CLIENT wrote the policy!”
Other policies specifically give the insurer the right to demand the PA’s EUO. Many commercial policies state: “The insurer has the right to examine any insured under oath, outside the presence of any other insured, as many times as they reasonably require.” Thus, any insured, as defined by the policy, may be called for EUO.
The moral to this blog is: read the policy. It will tell you who may be compelled to submit to an EUO and, often times, it can stop an insurer that is asking its policyholders and their agents to jump through imaginary hoops which do not exist in the terms of the policy. Of course, if insurers demand actions of policyholders not stated in the policy, there is insurance jargon term for that, too: Bad Faith.