Have you ever heard insurance company representatives talk about how the policyholder "failed to give a meaningful examination under oath?" They may raise this issue if an insured defers some of the answers to the EUO questions to other people. So what happens if an insured appears for EUO but defers some of the answers to questions to others? That was one thing that occurred in a recent case involving State Farm in Florida.1

One of the named insureds appeared for EUO in a re-opened Hurricane Wilma claim. State Farm had requested Dr. and Mrs. Solano to appear for EUO, and their public adjuster, if they intend to rely on his knowledge and opinions. Dr. Solano appeared for the EUO and deferred to the public adjuster on the type and extent of damage, and the cost of repair. Dr. Solano answered questions about what he observed after the hurricane, and progress of repairs. He also deferred to his wife to answer a few questions. According to the case, after his EUO, Dr. Solano refused to allow his wife to give an EUO because he felt it might put her under too much stress. Their public adjuster also refused to give a statement under oath, taking the position that State Farm could not compel him to appear for EUO. He indicated that he might appear for an EUO in the future.

Later in the claim, State Farm took the position that the insureds had deprived it of a "meaningful EUO," among other alleged failures to comply with the policy duties after loss. The policyholders retained counsel who demanded appraisal and later scheduled Mrs. Solano’s EUO. State Farm reiterated its demand for the public adjuster to appear . Five days before the EUO of Mrs. Solano was set to take place, the Solanos filed suit against State Farm to compel appraisal of the loss. Mrs. Solano appeared for EUO as scheduled, but State Farm’s counsel refused to proceed with it because of the lawsuit filed five days before.

State Farm moved for summary judgment asking the court to rule that the insureds’ suit before complying with the pending requests for EUO prevented them from recovery under the policy. The trial court granted State Farm’s motion and ruled that the policyholders were not entitled to coverage because they failed to give a "meaningful EUO." The trial court entered final judgment for State Farm. The policyholders appealed that ruling.

Florida’s Fourth District Court of Appeals reversed the trial court’s ruling. The appellate court recognized there was not a total failure to comply with the EUO request; Dr. Solano appeared, answered questions, and deferred to others on some questions. State Farm did not demonstrate that the insured could compel the public adjuster to appear for EUO, and the court noted the public adjuster provided documentation to State Farm and even met its adjusters at the property during inspections and discussed the claim. The appellate court held there were issues of fact whether there was sufficient compliance with the policy to allow State Farm to settle the loss or go to appraisal.

This case disapproves the thought that insurance carriers can get insureds to appear for EUO, ask them questions, and then claim that the EUO was insufficient and there should be no coverage as if the policyholder failed to appear for the EUO.

1 Solano v. State Farm Florida Ins. Co., 2014 WL 1908827 (Fla. 4th DCA May 14, 2014).