Policyholders owe their insurers a broad duty of cooperation in assisting the insurance company assess and value the loss, and even to determine whether there is coverage at all. Part of this cooperation obligation requires a policyholder to submit to an Examination Under Oath (EUO) if requested by their insurer.
What exactly is an EUO?
An EUO is similar to a deposition in a lawsuit. In a deposition, lawyers for one side question a witness or party regarding facts and legal theories underlying the case. Similarly, an EUO is the insurance company’s chance to ask the policyholder questions about the loss.
In an EUO, the insurer (typically through their attorney) asks policyholders questions about the loss and the claim. Insurers request EUOs for a myriad of reasons, including just to get more information about a loss, or, when they suspect foul play. Insurers do not have to tell policyholders when they suspect fraud. While the California Department of Insurance’s Fair Claims Settlement Regulations require insurers to share substantial information with their policyholders during claims, they also create an express exception to that rule when the insurance company suspects fraud. (10 C.C.R. 5 §§ 2695.7(b)(2) and (c)(2)).
Insurance companies can require a policyholder to submit to an EUO any time after the loss. An EUO can go on for however is considered “reasonable” under the circumstances. This can result in lengthy or even multiple examinations.
EUOs are costly and time consuming for insurance companies, and therefore, if an insurance company is requesting one, there is likely a significant issue that poses a barrier to resolving the claim. Because of the seriousness of an EUO, policyholders have the right to bring their own attorneys, and those attorneys have the right to assert the same objections that they could in a lawsuit. Hiring an attorney for an EUO is relatively common and is not a breach of the duty to cooperate.
Represented or not, a policyholder must cooperate and be honest in EUO. If they refuse to answer questions, this may rise to a breach of their cooperation obligations and can lead to a denied claim.