Insurers often require an insured to attend an examination under oath – a formal proceeding where insurers ask questions about a loss that may affect coverage – related to first party property insurance claims. During a recent Combined Claims Conference panel on the subject, Brian Mizell a California-based partner at McDowell, Shaw, Garcia & Mizell, explained some common questions that arise.
Three factors govern an EUO:
- The insurance policy which grants the insurer the authority to conduct the EUO.
- Case law that supports the basis for conducting EUOs: Hickman v. London Assurance. Corp.(1920) 184 Cal. 524, West v. State Farm Fire & Cas. Co. (9th Cir. 1989) 868 F.2d 348, Fine v. Bellefonte Underwriters Insurance Co., 725 F.2d 179, 183-84 (2d Cir. 1984)
- Statutory law.
The most common questions related to EUOs include:
1. Does the insured have to comply before he/she gets paid?
Yes. Case law to support it is Brizuela v. California Ins. Co. (2004) 116 Cal. App. 4th 578.
If the insured refuses to cooperate, Mizell explained the typical process is the insurer will send out two EUO notices. The notice may be sent certified and regular mail to confirm receipt. He suggested emailing the notice if the insured has been responding to emails.
2. Can multiple insureds sit in on EUOs together?
They don’t have to, according to Mizell. He cited the case of State Farm Fire & Cas. Co. v. Tan, 691 F. Supp. 1271 (S.D. Cal. 1988) that supports separate EUOs of multiple insureds is allowed.
Rather than scheduling both, he recommended stating that the second EUO will commence as soon as the first is finished.
3. Do you have to give a copy of the recorded statement to insured before EUO?
No; however, Mizell said there is sometimes a disconnect between the special investigations unit and the litigation handler when SIU sends it out to the policyholder.
“You have the right to withhold the statement, you don’t have to give it to them,” Mizell said, citing the Brizuela case.
4. Can you call insured and tell him or her to come in tomorrow for EUO?
Mizell said it’s all about a reasonable time. While an adjuster can contact an insured to schedule a last minute EUO, the adjuster can’t force them to attend. California Insurance Code Section 2071.1 (a) relates to the insured and carrier rights and duties.
Mizell emphasized that a copy of this code must be sent out each time a notice of an EUO is sent out on California claims.
5. Does a public adjuster have a right to sit in on an EUO?
According to Mizell, the answer is maybe. This issue must be considered on a case by case basis. He suggested the possibility of taking both EUOs. Section 2071.(4) of the California Insurance Code states the insured may be represented by counsel.
6. Does the insured have a right to record the EUO?
Section 2071.(4) of the California Insurance Code states the insured may record the EUO. Mizell recommended that the recording be turned off during breaks. There is no requirement by either side to advise that the EUO will be videotaped.
Some carriers routinely videotape all EUOs.
7. What if the insured is underage, 16 or 17?
Mizell recommended separating parents and kids during their EUOs.
8. Does the insurer have to pay for the EUO transcript copy for the insured?
Yes, according to California Insurance Code Section 2071.1 (5) have to provide it free of charge within 10 business days.
9. What if the insured pleads the fifth on every question?
Mizell recommended continuing the EUO to get it on the record.
10. Can the insured object to questions?
Yes, according to California Insurance Code Section 2071.5 (6), they may assert any objection; however, Mizell noted their responses could affect the coverage determination. Lastly, can point out California Insurance Code Section 2071.5 (7) which outlines that there are criminal and civil penalties for fraud.