An Examination Under Oath is a tool available to property insurers in adjusting Oklahoma insurance claims. The more typical term is the acronym (sometimes called “EUO”). Like many industries, insurance adjusters need to be able to communicate quickly. Just try saying “examination under oath” three times really fast while gulping some hot coffee and see how it works out for you!
We classify an EUO as a tool for insurers because it is a means to obtain information. An adjuster must gather the facts to be able to make the right decision. The Oklahoma Supreme Court has said that an insurance company has a legal duty to investigate claims. Without solid facts, then the wrong decision can be reached. This isn’t good for the insured or for the insurer.
Attorneys not experienced in the insurance industry tend to think an examination under oath is the same as a deposition. It is not. The confusion is because there are some similarities in that the typical examination under oath involves using a court reporter.
The policyholder or insured is placed under oath and sworn to tell the truth. The attorney for the insurance company then asks questions. There can be severe penalties for not telling the truth in an examination under oath. The consequences include losing the right to be paid for the claim and sometimes criminal charges with jail time. Perjury, or not telling the truth while under oath, is a bad idea. So, attorneys who really aren’t familiar with examinations under oath naturally fall back to calling the procedure a deposition.
The procedure has been around for well over 100 years in the insurance industry. In an examination under oath, the insurance company, usually through an attorney, can ask the insured questions about the loss, damages, and get to the details. This is typically important for exclusions or policy defenses. The insured is required to provide honest answers to the questions. Therefore the insurance company can find out the answers required to determine coverage.
An examination under oath can also be used in claims where the damages are not completely clear to the adjuster. The policyholder can be asked to explain the damages or what is being claimed. In certain claims, this is a way to filter through the loss to reach the proper amount of payment to make.
The United States Supreme Court specifically recognized the purpose of these examinations in Claflin Commonwealth Insurance Company, 110 U.S. 81, 94-94; 3 S.Ct. 507, 515; 28 L.Ed. 76, 82 (1984).
The Supreme Court stated :
The object of the provisions in the policies of insurance, requiring the assured to submit him-self to an examination under oath, to be reduced to writing, was to enable the company to possess itself of all knowledge, and all information as to other sources and means of knowledge, in regard to the facts, material to their rights, to enable them to decide upon their obligations, and to protect them against false claims. And every interrogatory that was relevant and pertinent in such an examination was material, in the sense that a true answer to it was of the substance of the obligation of the assured. A false answer as to any matter of fact material to the inquiry, knowingly and willfully made, with intent to deceive the insurer, would be fraudulent.
Examinations under oath can be conducted nearly anywhere. The most common location is usually an attorney’s office or a conference room at a court reporter’s place of business. However, using the courthouse is another venue that we have observed numerous times.
Many insurance companies overlook the availability of EUOs as an investigative tool. It is a recognized and approved means to find out valuable and important information during the claim process when depositions, subpoenas, and the typical discovery tools used in litigation are not available.
Policyholders with valid claims should not fear the process as it is a proper way for an insurer to ask questions and learn additional information. Although insureds may want to have their own legal counsel present for advice about the process and their legal rights. The decision of a policyholder to attend the EUO with independent legal counsel should not be viewed with suspicion by the claim examiner.
Many people in unfamiliar circumstances consult with professionals and it is appropriate to do so. Everyone in an insurance claim has a legal right to have an attorney represent them. It’s also not unusual to see the lawyers drop out of the claim once the EUO is finished. The attorneys are used for the formal part of the questions, then the adjusters make a decision. This is also true for policyholders. The attorney attends the examination under oath, then the insured asks the attorney to step aside until the claim is resolved.
The frequency and use of examinations under oath really vary in the insurance claims business. Some insurers make frequent use of EUOs. We have run across adjusters with 20 plus years of service that have never asked for an examination under oath. We tend to find them most often used in fire claims.
In a fire loss claim, the circumstances may point to possible arson or fraud concerns. An examination under oath allows the insurance adjuster to find out important details. If arson is involved then Oklahoma law bars payment. In other words, the law is favorable for an insurer to deny paying the claim if arson occurred.
Using an Oklahoma lawyer with actual experience with examinations under oath can be a huge time-saver and also a good way to ferret out the facts. Although an attorney is not required, it makes sense to hire one. Once the claim reaches the point that the EUO is necessary, then having an attorney involved can really help.
If you need legal representation with an insurance claim or an examination under oath, feel free to give us a call! 918-940-2222.