Over a course of the last few years I’ve written about California Insurance Code 2071.1 and an insured’s rights, which includes the right to review their claim file before an examination under oath (EUO) is conducted. As the year draws to a close and the number of EUOs I witness only go up, I think the topic of EUOs should be revisited. Protecting the insured has become more difficult. Usually, examinations under oath only occur after the insurer has sent the insured’s claim to a special investigation unit and from that point on, the reality for the insured is that the investigation conducted is to find inconsistencies in the insured’s recount of the loss to deny the claim. Although there are many reputable attorneys on behalf of the insurer conducting the requested examinations under oath reasonably and respectfully, there are also a handful out there with the distinct reputation among the insurance community well known for going out of the way to put the insured through a series of events that mimic a criminal inquiry that is both stressful and unnecessary.

If you are an insured about to undergo an examination under oath, the ability to evaluate or know the reputation of the attorney conducting the examination under oath and having proper representation at the time of the EUO, may be the difference to a fairly conducted EUO and that which will be hostile and more likely than not result in a denial of the insured’s claim.

Under California Insurance Code 2071.1(2),

An insurer may conduct an examination under oath only to obtain information that is relevant and reasonably necessary to process or investigate the claim.

When interpreting the Insurance Code, what may be considered “relevant and reasonably necessary” is rather broad. The Code subjects the insured to a litany of questions during the EUO regarding financial viability in the form of banking statements, cash withdrawals, taxes and credit card statements over the last few years, along with cell phone records and receipts for purchases to be open and fair game for the insurer to question an insured about after a loss. All these stressful questions that open up an insured’s life to the scrutiny of the insurer and their representatives can be overwhelming and intimidating therefore the insured must be protected to make sure that the pace, tone, and tenor of the EUO being conducted is proper, and if not, that these issues must be documented onto the EUO transcript appropriately. Making sure that the insured’s testimony is properly interpreted in subsequent questioning may prove to be the difference between coverage or denial of a claim.

The reality is that an EUO can turn hostile when the insurer’s representative takes the matter personally and is determined to make the insured uncomfortable and wary to elicit testimony taken under a stressful condition in order to find inconsistencies in testimony. Traditionally, an EUO is a tool during the claim’s process that is supposed to be a friendly inquiry. However, it has evolved over time as a tool for some insurers to deny claims.