An examination under oath—or EUO, as we call it in the business—is a tool that’s been in the insurance company arsenal for a hundred years. The concept arose to help insurance companies investigate suspicious claims and the potential for fraud, usually involving property or liability claims.
An examination under oath is very much like a deposition, except that a lawsuit isn’t pending; instead, it occurs as part of the claims process with the insurance company. It’s an indication that, for some reason, the insurance company suspects something odd, fishy, or potentially fraudulent about the claim.
The insurance company has an absolute right—written directly into property and casualty policies across the country—to ask the insured to testify under oath as to the circumstances surrounding the claim.
An examination under oath is typically conducted by a lawyer hired by the insurance company to ask the insured, or people defined as insureds, to come in and testify. They are typically asked to bring in supporting documents related to the claim, and a court reporter is present.
It can be a scary and daunting process. The process makes people very nervous, which is quite understandable because an examination under oath isn’t what one would ordinarily expect in the claims process.
If you refuse to go to the examination under oath, you will essentially void your claim in its entirety. You will not be entitled to a single dollar of your claim due to your failure to cooperate. Cooperation includes appearing at an examination under oath.
I typically recommend that you go to the examination under oath if:
•You want your claim to be paid.
•You don’t want the insurance company to report your claim to the state as suspected fraud.
•You have a good faith basis for your claim.
•You are truthful.
In terms of understanding and being prepared for the EUO, that’s another issue. First, try to understand the insurance company’s basis for requesting an examination under oath. The best way to do that is to consult with a qualified attorney.
I’ll give you the simplest of examples: There is a fire. The fire marshal does an inspection and determines that the fire is suspicious—that an incendiary device or accelerant was found.
An incendiary device helps create fire; an accelerant helps fire spread quickly.
Unless the fire marshall has already determined that the cause of the fire has nothing to do with the insured, a suspicious cause and origin of a fire (or another loss) is likely to trigger an insurance company demand for an EUO.
When that suspicion arises, the insurance company is entitled to a lot of financial information to try to determine whether the insured had a reason or motive to cause their own insurance loss, and thereby get the insurance money. In refusing to turn over those tax returns, bank statements, etc. which are being requested by the insurance company, you will be deemed to not have cooperated and will lose the entirety of your claim.
The most important thing I can share with you is that if you do get a demand for an examination under oath, contact a qualified attorney to at least discuss the matter, even if you choose not to engage the services of an attorney.
If you have questions regarding the scope of your obligation to cooperate with an insurance company or have received a demand for an examination under oath, do not hesitate to contact me to discuss it.
Evan S. Schwartz
Founder of Schwartz, Conroy & Hack