Most property and business policies contain a provision requiring the insured to submit to an examination under oath (known as an “EUO”) by the insurance company in connection with an insurance claim. It is similar to a deposition, with the policyholder providing sworn testimony under penalty of perjury. However, it is under a contractual policy requirement not the litigation process.
The standard form policy codified in California requires an insured to “submit to examinations under oath by any person named by” the insurance company.1 The California Court of Appeal has held this means the insured must sit for an examination under penalty of perjury and “answer all proper questions as part of the insurer’s investigation of the insured’s claim.”2
An insured cannot refuse to participate in an examination under oath. Unlike other policy conditions for presenting a claim, like timely notice and submission of a proof of loss, in California there is no requirement that an insurance company show prejudice to deny a claim based on failing to submit to an examination under oath.3 When an insured does not answer material questions during an examination under oath, an insurance company can “properly deny coverage.”4
This near automatic denial rule means that the insured has little choice about doing the examination under oath where requested by an insurer.
Burdensome production of extensive documents are often requested by the insurance company attorney, many of which may be private and objectionable. Although it is part of the claim process, and the insurer’s good faith duties apply, in practice the examination under oath is frequently treated as an adversarial process by the insurer.
That being said, in California—and most states—there are Fair Claim Handling regulations, and laws that tell insurers what they must, can, and cannot do.
Above all, insurance companies have the legal duty to investigate and process insurance claims fully, promptly, and in good faith and deal fairly with insureds.
One thing public adjusters and policyholders should do during a claim is to ask for and get all claim-related documents from your insurer’s files before answering questions under oath and before signing anything relating to settlements or confidentiality.
In California, insureds are legally entitled to see what’s in their claim file.5 Such information can often empower insureds in the claim process and level the playing field.
Below are some legal rights insureds have when insurers ask them to submit to an examination under oath in California. These rights are there to protect insureds:
- An insurer that determines that it will conduct an examination under oath of an insured shall notify the insured of that determination and shall include a copy of this section in the notification.
- An insurer may conduct an examination under oath only to obtain information that is relevant and reasonably necessary to process or investigate the claim.
- An examination under oath may only be conducted upon reasonable notice, at a reasonably convenient place and for a reasonable length of time.
- The insured may be represented by counsel and may record the examination proceedings in their entirety.
- The insurer shall notify the insured that, upon request and free of charge, it will provide the insured with a copy of the transcript of the proceedings and a tape of the proceedings, if one exists. Where an insured requests a copy of the transcript, the tape, or both, of their examination under oath, the insurer shall provide it within 10 business days of receipt by the insurer or its counsel of the transcript, the tape, or both. An insured may make sworn corrections to the transcript so it accurately reflects the testimony under oath.
- In an examination under oath, an insured may assert any objection that can be made in a deposition under state or federal law. However, if as a result of asserting an objection, an insured fails to provide an answer to a material question, and that failure prevents the insurer from being able to determine the extent of loss and validity of the claim, the rights of the insured under the contract may be affected.
An insurer cannot ask for unreasonable “proofs of loss” such as secondary proofs. For example, if an insured provides photographs or video of items in their home, they cannot then be compelled to provide receipts as well if they contain essentially the same information.6
1 California Insurance Code §2071(a).
2 Abdelhamid v. Fire Insurance Exchange (2010) 182 Cal.App.4th 990.
3 Id. at 1004.
4 Id. at 1005.
5 Cal. Ins. Code §2070, 2071.
6 Cal Ins Code §790.03.