Insurance And Examination Under Oath

There is a part of the claims handling process that insureds need to be wary about.  That part is when an insurance company asks the person making a claim to submit to an Examination Under Oath (EUO).

If the insurance contract provides for it, the insurance company may require an EUO as a condition to a suit on the policy.  The purpose of such EUO clauses has been described this way:

The insured agrees agrees, at reasonable ties and places, as often as required , to submit to examination by an agent of the insurance company, and to submit all relevant books of account, invoices, vouchers, etc.  If is clear that the chief purpose of this privilege to the insurance company is the ascertainment and adjustment of the loss which has already occurred.  The insurance company, in its policy, evidences in many ways its desire to avoid the necessity of litigation in the settlement of its losses.  It reserves the right to have the benefit of the examination provided for before suit can be sustained.

It was made clear in the 1921, Texas Commission of Appeals opinion styled, Humphrey v. National Fire Insurance Company of Hartford, that abatement of the suit is the proper means to enforce such a clause.

So, the law is clear that the insurance company that issues a policy with a clause allowing for an EUO is enforceable by the insurance company.  Further, the insurance policy will normally require the insured to cooperate with the insurance company investigation of the claim. But, … once an insurance company has denied a claim, then all requirements of the insured to cooperate with the insurance company cease.  This is made clear in the 1990, Texas Supreme Court opinion styled, Viles v. Security National Insurance Company.

As a practical matter, when an insurance company is asking for an EUO, this is a pretty strong indicator that the insurance company has plans to deny the claim and it is time to seek the help of an experienced Insurance Law Attorney.

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