In an insurance carrier’s effort to investigate an insurance claim, it may request that the insured sit for an examination under oath (“EUO”). In an EUO, the insurer’s representative has an opportunity to ask the insured questions about the claim while the insured swears to answer the questions truthfully. Participating in a requested EUO is mandatory under most insurance policies, and an insured’s failure to appear or to answer the questions at the EUO may forfeit the claim. With the potentially catastrophic consequences for refusing to answer a question, many insureds wonder if they must answer questions about their personal finances during an EUO.
An EUO is not an opportunity for the insurance company to ask any question; the question must relevant to the claim. In the Florida Third District Court of Appeal case, De Leon v. Great American Assurance Company, the court was faced with the question of whether the insured “had improperly refused to submit to and complete an appropriate and contractually required pre-suit examination under oath.”1 Mr. De Leon filed a claim with Great American Assurance Company after his eighteen-wheeler commercial truck was stolen. During its investigation, Great American requested that Mr. De Leon appear for an EUO. At the EUO, Great American’s lawyer probed into the details of unrelated events such as Mr. De Leon’s prior fraud conviction and who was living with Mr. De Leon at the time. Mr. De Leon refused to answer many of the questions. Great American argued to the appellate court that “De Leon’s refusal to complete the examination and provide the requested documents prevented Great American from exercising its contractual right to fully investigate his claim.” The court rejected Great American’s argument. The court found that Mr. De Leon was within his right to “refuse” to answer questions that were disrespectful and had nothing to do with the merits of the claim.
An insurance company has the right and obligation to investigate reported claims.
[T]he insurer’s rights tend to be measured by ‘reasonableness,’ with the courts attempting to balance the insurer’s legitimate interest in ascertaining the validity and extent of the claim against the insured’s… rights to both privacy and prompt payment of sums due under the terms of the contract.2
A reasonable question in an EUO varies for each claim. Questions into an insured’s personal financial information would likely be appropriate when there is a reasonable basis to believe that the claim is fraudulent. If an insured receives a request to attend an EUO, they should consider retaining counsel to assist them in preparing for the EUO and advising them during the EUO on whether to respond to invasive, non-claim related questions.
1 De Leon v. Great Am. Assur. Co., 78 So. 3d 585, 586 (Fla. 3rd DCA 2011).
2 Fla. Gaming Corp. v. Affiliated FM Ins. Co., 502 F. Supp. 2d 1257, 1261 (S.D. Fla. 2007).