Protection of Policyholders from the Inappropriate Abuse of EUO Provisions

J.P. Gonzalez-Sirgo
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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 PIP or UM personal injury 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 an EUO mandatory prior to filing a lawsuit for failing to pay a homeowner's 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 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 an 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.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

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