Last year, I wrote several posts in a series on Examinations Under Oaths. Last week, I was contacted by a policyholder who had read my posts after he received a letter from an attorney to schedule an examination under oath on his claim for fire damage. This insured, like many others, wanted to understand why the insurance company was demanding his examination.

In an effort to gain more perspective from the carrier’s side, Michael Boyer has written about examinations under oath in the text, Property Investigation Checklists: Uncovering Insurance Fraud, Tenth Edition.

Boyer tells readers that the demand for an examination under oath is not a new phenomenon. It was first included in the 1943 standard fire policy’s cooperation clause. The 165 line policy required an examination under oath on lines 113 -122. Boyer recalls the early 1970s, when examinations were almost routine on a claim, but the scope of the examinations were more similar to today’s recorded statement.

In Florida, day long examinations under oath are on the rise. Carriers have demanded examinations from persons who not covered by the policy and on claims that could be investigated without the an EUO.

Boyer, who has been a licensed independent adjuster and licensed private investigator in California for decades, says examinations under oath have three purposes:

  1. To permit the company to investigate all matters relevant and material to the insurance and loss, which are frequently within the sole knowledge of the insured;
  2. To determine its liability, if any, under the policy; and
  3. To protect itself against false claim.

Boyer cautions that insurance companies should limit the scope to matters relevant and material to the insurance and claim, and that insurers should not use the EUO to harass the insured or to “put him through the mill.”

As a practical matter, an examination is required only when:

  1. There are serious questions regarding the claim or the application for insurance;
  2. The insured has been vague and uncooperative during the initial investigation; or
  3. The company wants to complete its investigation, or solidify its position prior to any action, such as denying the claim, filing for declaratory relief, or making an offer to settle the claim.

If only it always worked that way in real life… check out the Chip Merlin’s post, The Games Insurance Companies Play, to read the examination under oath transcript of Jose De Leon. As Chip explained,

The insurance defense counsel’s improper questions and the threatening conduct were not unusual. As many policyholders have experienced, this behavior during examinations under oath is standard operating procedure for many insurance defense lawyers.

Policyholders should prepare themselves and hire counsel to attend the examination if they have concerns. Only a few of the letters we see demanding examinations under oath tell insureds they can bring their own attorney (kudos to Sandy Burnette’s office) to attend the examination. Policyholders should know they have this right. The insurance company has a lawyer and so should you.