I received a comment that was an important and recurrent question regarding examinations under oath. The issue concerns the seemingly endless questions of possible immaterial nature asked by the insurer: 

"Question concerning Examinations Under Oath.

The attorneys for the insurance companies doing the EUO seem to be asking questions that have nothing to do with the loss, (i.e., How long have you lived in this state, request a list of previous addresses, what high school did you attend, where were you born. Also they request tax returns for three to five years).

We have seen the EUO’s last one to four hours with questions that seem to have nothing to do with the fact that the insured filed a claim for damages that they have bought insurance to cover.

Are there guidelines for questioning during a EUO?"

In my firm, there are some competing views on this topic. In my view, "better safe than sorry." Answer questions honestly and get it over as soon as possible. I generally require my clients to turn over all requested documents in their possession, including tax returns, when there is even a slight chance of relevance.

A question would have to be outrageous before I told a client not to answer because there is little upside and a significant potential downside–denial of an otherwise valid claim. In most cases, I ask a very simple question which usually points to what my client should do- "Why risk not slogging through the questions?"

As indicated in Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300, 305 (Fla. Dist. Ct. App. 4th Dist. 1995):

"A provision… requiring the insured to submit to examination under oath must be complied with, and, if breached, the insurer will be deprived of a valuable right for which it had contracted… American Reliance Ins. Co. v. Riggins, 604 So. 2d 535, 535-36 (Fla. 3d DCA 1992)(insured is absolutely required to submit to an examination under oath when requested by an insurer). The purpose of the examination under oath provision was set forth by the United States Supreme Court in Claflin v. Commonwealth Ins. Co., 110 U.S. 81, 3 S. Ct, 507, 28 L. Ed. 76 (1884), in which the court stated that the object of the policy provision is to enable the insurer to possess itself of all knowledge and all information as to other sources and means of knowledge, in regards to the facts, material to its rights, to enable it to decide upon its obligations and to protect it against false claims."

So what happens if you do not fully comply with answers and requests for documents? Haiman v. Federal Insurance Company, 798 So. 2d 811, 812 (Fla. Dist. Ct. App. 4th Dist. 2001) answered that question in this manner:

"total failure to comply with policy provisions made a prerequisite to suit under the policy may constitute a breach precluding recovery from the insurer as a matter of law. If, however, the insured cooperates to some degree or provides an explanation for its noncompliance, a fact question is presented for resolution by a jury."

Again, why risk it? In the vast majority of situations the wiser course is to go through the examination under oath and then get paid.

Most Courts take a broad view of relevance and materiality when dealing with examination under oaths of insurance claims. Fine v. Bellefonte Underwriters Ins. Co., 725 F.2d 179, 184 (2d Cir. N.Y. 1984) provides an example of the logic:

"It thus appears that materiality of false statements is not determined by whether or not the false answers deal with a subject later determined to be unimportant because the fire and loss were caused by factors other than those with which the statements dealt. False sworn answers are material if they might have affected the attitude and action of the insurer. They are equally material if they may be said to have been calculated either to discourage, mislead or deflect the company’s investigation in any area that might seem to the company, at that time, a relevant or productive area to investigate."

So, I get my clients ready for the same boring questions, background and otherwise, that are asked by the insurance counsel. I have even written out answers in advance and give them to the insurance company as we start. That usually upsets the opposing counsel. I don’t know why, since we get through it all faster. I want to get to my favorite topic of claims–how much is getting paid and when.

For public adjusters, never represent the policyholder at an examination under oath. Do not object, interfere, or tell the policyholder what to do or say. Such conduct would be the unauthorized practice of law in most states. Policyholders going into examinations under oath should hire counsel. It is a serious proceeding with significant legal consequences.