Insurance Requirement Of Examination Under Oath (EUO)

Insurance lawyers will often get calls wherein the person on the other end of the line is explaining to the lawyer that his insurance company wants to perform an examination under oath (EUO) of them before going any further with the claim.  And the question is, “Do I have to do that?”  Nine times out of ten, the answer is yes.

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

The insured agree, at reasonable times and places, as often as required, to submit to examination by agent of insurer, and to submit all relevant books of account, bills, invoices, vouchers, etc.  It is clear that the chief purpose of this privilege to the insurer 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 losses.  It reserves the right to have the benefit of the examination provided for before suit can be sustained.

The above was explained in the 1921, Tex. Com App., in the opinion styled, Humphrey v. National Fire Ins. Co. of Hartford.

As is explained in the 1989, Beaumont Court of Appeals opinion, State Farm General Ins. Co. v. Lawlis, the proper remedy when a lawsuit has been filed before the EUO has been performed, is to abate the lawsuit until the completion of the EUO.  The Lawlis case states,”Insurance policy provisions requiring the insured’s submission to examination under oath as a condition precedent to sustaining suit on the policy are valid.  The insurer’s proper remedy to enforce the condition precedent is abatement rather than bar.”