A tool available to insurers to carefully investigate claims and work to combat fraud
The insurance oath under oath (“EUO”) is a condition that precedes compensation under a first-party property insurance that allows an insurer to compel an insured to submit to an interrogation by a representative of the insurer under oath. It is a formal type of interview that is approved by an insurance contract. EUO is taken under the authority given by the insured’s contract when he or she acquires an insurance, to submit to the insurer’s requirement that the insured appear and take the oath. Failure to appear and testify is considered a violation of a material condition that may cause the insured to lose the right to compensation.
EUO is carried out before a notary and a certified shorthand reporter. The reporter is present to take the oath to the interviewee and record the entire conversation and prepare a transcript, in question and answer format, to be read, reviewed, corrected and signed by the witness due to perjury or by an oath taken before a notary or judge.
EUO is a tool used sparingly by insurance companies in the United States. A professional insurer will only require an insured to apply to an EUO when a thorough claims investigation raises questions:
- on the application of the coverage to the facts of the damage,
- the possibility of an attempted fraud, or
- to assist the insured in the obligation to prove to the insurer the cause and amount of the damage.
Although rarely used, the EUO is an important tool needed by insurers in terms of coverage, destruction of evidence needed to prove a compensable loss or the amount of loss or evidence indicating that an attempted fraud is taking place.
The reason for the investigation under oath
In 1884, the Supreme Court of the United States declared the purpose of the EUO as follows:
“The purpose of the provisions of the insurance police, which require the insured to submit to an EUO, in order to be reduced to writing, was that enable the company to possess all knowledge and information about other sources and knowledge, with respect to facts, essential to their rights, to enable them to decide on their obligations and to protect them from false claims;. And every interrogation that was relevant and relevant in such an investigation was essential, in the sense that a true answer to that was the content of the insured’s obligation. A false answer to all the facts relevant to the investigation would be fraudulent. If it was done, with the intention of deceiving the insurer, it would be fraudulent. If it achieved its result, it would be a scam. if it failed, it would be an attempted fraud. And if the matter were substantial and the allegation false, in so far as the party does, and knowingly did so, the intent to mislead the insurer would necessarily be implicit, for the law presupposes that every man refers to the natural consequences of his actions. No one can be allowed to say, with regard to his own statements on a material question, that he did not expect to be believed; and if they are deliberately false and deliberately made, the fact that they are material evidence of an attempted fraud isbecause their essence, in the eyes of the law, is that they have a tendency to influence the behavior of the party who has an interest in them and to whom they are directed. ” [Claflin v. Commonwealth Ins. Co., 110 U.S. 81, 3 S.Ct. 507, 28 L.Ed. 76 (1884)] (my italics)
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Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims management, non-insurance and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.
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