The examination under oath (EUO) is a topic often covered in this blog. When an EUO is requested by the insurance company, the policyholder who submitted the claim essentially has no choice but to acquiesce. A failure to do so would be deemed as a failure to cooperate or comply with a condition of the policy and from the insurance company’s perspective, that would be a basis to deny a claim altogether. I have yet to come across an instance where the insurer did not deny a claim due to a policyholder’s refusal to submit to an EUO.
However, in the state of Washington, an insurer does not have an absolute right to an EUO. In Staples v. Allstate Insurance Company,1 a case decided last year, the supreme court of Washington held that if an EUO is not material to the investigation or handling of the claim, an insurer cannot demand it. In Staples, the policyholder gave two recorded statements, produced documents and signed an authorization allowing Allstate to obtain other records, but disputed Allstate’s need for an EUO. In agreeing with the policyholder, the court stated:
[T]here must be some outside limit to an insurer’s ability to demand an EUO….’an insurance company should not have a license to burden an insured with demands for items that are immaterial.’
The court in Staples further addressed whether the insurer must show prejudice before denying a claim for noncooperation including a refusal to submit to an EUO. The court reaffirmed prior decisions holding that actual prejudice must be shown. Therefore, if a policyholder refuses the insurer’s request for an EUO, the insurer must show prejudice before it can deny the claim using that basis.
The above underscores the importance of knowing the law when it comes to examinations under oath. If a policyholder is facing an EUO and has questions, he or she should consult an insurance professional. It is better to be informed than not.