Protection of Policyholders from the Inappropriate Abuse of EUO Provisions

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

When policyholders file claims, their insurance policy generally will provide the insurer with the right to require its insured to participate in an examination under oath (EUO) or a compulsory medical examination (CME) in cases involving other types of claims.  Insurance companies have a history of using these tools to trap unwary policyholders and avoid paying claims.  Florida homeowner’s policies generally contain policy language that makes compliance with a EUO mandatory prior to filing a lawsuit for failing to pay a homeowners claim. 

Participation in an EUO, which also usually involves the production of documents, is a condition precedent to filing a lawsuit for breach of insurance contract.  However, Florida courts have recently protected policyholders from carriers who attempt to use these investigation tools as a sword rather than a shield.  The Florida Fifth District Court of Appeal has ruled that participation in a CME (or EUO) may be a condition precedent to filing a lawsuit for breach of contract, but failure to comply with the condition does not bar the insured’s right to file a lawsuit unless the insurer can demonstrate prejudice.

The Florida Fifth District Court of Appeal case of Whistler’s Park, Inc. vs. The Florida Insurance Guaranty Association has ruled that non-compliance with an EUO provision does not bar recovery if the insurer was not prejudiced.  The Fifth District in both Whistler’s and State Farm Mutual Automobile Insurance Company v. Curran discussed the tendency of insurance companies to misuse EUO and CME requests.  In Whistler’s, the court observed that non-compliance with an EUO request had spurred “a cottage industry of EUO litigation” asserting the failure as a defense to payment.  The court also pointed out, “The actual, if unglamorous, true purpose of the EUO – verification of the insured’s loss – has been lost in this larger battle.  No doubt there can be genuine instances of insurance fraud, but the recent and ever-escalating number of EUO cases that have arisen all over the state appear to be more about strategy then proof.” (Emphasis added).

The court also noted the potential for abuse in this process was exacerbated because most homeowners policies permit insurers to demand multiple EUO’s and the production of voluminous records even though the insured lacks counsel.  The Third District Court in De Leon v. Great American Assurance Co. reached a similar finding that the insurer in that case exploited its contractual right to a EUO by using “unwarranted” and “intrusive” questions that the court found to be improper, irrelevant and impertinent.  The insurers also repeatedly threatened the policyholder that refusal to answer a question would void coverage.  The court determined that the policyholder was completely justified in refusing to answer such questions.

If you have questions about your obligations when filing a homeowners insurance claim, my law firm has helped many homeowners obtain full compensation from their insurance companies.  If you have questions about Miami-Dade homeowners insurance claims, you are welcome to contact my Florida insurance claims dispute law firm.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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