Most property and business policies contain a provision requiring the insured to submit to an examination under oath (known as an “EUO”) by the insurance company in connection with an insurance claim. It is similar to a deposition, with the policyholder providing sworn testimony under penalty of perjury. However, it is under a contractual policy requirement not the litigation process.
I suppose a lot of professions are cyclical. In my 25 years if practice I have sometimes found that I will go years without getting certain types of cases and then I will get two or three all at once. Lately, I have been asked to look at cases where the carrier is claiming that the policyholder breached post-loss duties under the policy (other than prompt notice). The argument is that the policyholder has failed to cooperate with the carrier’s investigation of the claim.1 Mainly the policyholders are accused of not submitting to an examination under oath (EUO).
Often after a property loss, the insurance company may request a recorded statement of a policyholder in the days following the loss. This differs from a request for an Examination Under Oath, but policyholders must be familiar with both.
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.
There have been many posts on this blog regarding Examination Under Oath (EUO). Previous posts have dealt with who may sit for an EUO, how to handle an EUO, and what happens after an EUO. I would implore you to read through those posts by Chip Merlin, Rob Trautmann, Jeffrey Greyber, Shaun Marker, and others. One issue touched upon but not thoroughly explained was that an EUO is not a deposition.
If the allegations of the complaint prove true, Hanover Insurance Company has lost sight of the golden rule in how to treat its own customer in a Sandy claim. How else could an insurance carrier explain that its lawyer called their policyholder/customer an idiot during an examination under oath in a Hurricane Sandy claim?
In practically every homeowner insurance policy, the insurance company requires the insured to perform certain duties after a loss. Among the duties is to provide the insurance company, when requested, documents including banking or financial records. Often this type of documentation is requested in conjunction with an examination under oath, but can also be requested during the initial claim investigation. Many policyholders are uncomfortable furnishing personal financial records in fear that such information will not be safeguarded and will be used improperly. Well, can an insured require an insurer to execute a confidentiality agreement that imposes limitations on the insurer’s use of the insured’s personal information? This issue was addressed by a court of appeals in Oregon last month and the answer was no.
The examination under oath (EUO) is a topic often covered in this blog. When an EUO is requested by the insurance company, the policyholder who submitted the claim essentially has no choice but to acquiesce. A failure to do so would be deemed as a failure to cooperate or comply with a condition of the policy and from the insurance company’s perspective, that would be a basis to deny a claim altogether. I have yet to come across an instance where the insurer did not deny a claim due to a policyholder’s refusal to submit to an EUO.
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
On Wednesday, I found myself in Orlando participating in an examination under oath (“EUO”). During discussions with the insurer’s legal counsel, the issue came up as to whether an EUO has any evidentiary value in a trial. It has always been my understanding that EUO testimony may be admissible at trial, but carrier’s counsel was of the opinion that an EUO was of no evidentiary value. I researched the question and thought it worthwhile to share my findings.