Examination Under Oath

| Read Time: 9 minutes

Most insurance policies allow the insurance company to require a policyholder to answer questions under oath and to produce documents and other information so the insurance company can investigate an insurance claim. This formal legal proceeding is called an examination under oath. The examination part of this process is requiring the policyholder to answer questions that are asked by a representative of the insurance company. In most cases, the insurance company’s representative is an attorney who has been hired to investigate the policyholder and provide the insurance company with advice about how to handle the claim. The examination normally takes place at a court reporter or attorney’s office. In most cases, an examination will last for at least a few hours and will be recorded by a court reporter. Under oath means the policyholder must swear to answer the questions truthfully. For many, an examination under oath can be highly stressful. To be completely upfront, an examination under oath is not common. They are often requested when the insurance company suspects the policyholder has done something wrong or has attempted to deceive the insurance company. Other times, the insurance believes there is a reason it can deny the insurance claim. Regardless, an examination under oath is an important event in an insurance claim that a policyholder needs to take seriously. Preparation is key to a successful outcome. In addition, refusing or failing to submit to an examination under oath can result in the denial of your insurance claim. Why Does an Insurance Company Want to Take My Examination Under Oath? Below are some common issues insurance companies often want to investigate during an examination under oath: The policyholder misrepresented the cause of the damage. The policyholder made misrepresentations in the policy application. The policyholder committed a crime related to the insurance policy. The policyholder committed fraud. The policyholder is seeking significantly more money than what the insurance company believes is owed. The policyholder has not answered the insurance company’s requests for information about the claim. The policyholder has hired a contractor, adjuster, or other experts who have a bad history with the insurance company or has a history of red flags. The insurance company believes the policy does not cover the claim. The insurance company believes there is a policy exclusion that applies.   These are not small or insignificant issues. However, it is important to remember that the mere fact that an insurance company wants to conduct an in-depth investigation of an insured does not mean it has a reasonable basis to deny an insurance claim. On the contrary, insurance policies are interpreted broadly by courts in favor of expanding insurance coverage as much as possible. Still, it is important for an insured who has had an examination requested to consult with an experienced insurance attorney to ensure he or she is adequately prepared for the examination. What Does Your Insurance Policy Require You to Do? Insurance companies tend to treat policyholders in a very abrasive and demanding manner when requesting an examination. This is especially the case when the policyholder is not represented by its own attorney. It is not uncommon for the insurance company to out of the blue give a policyholder a day and time to appear at a location to be questioned under oath. These demands normally include an extensive list of documents the insurance company insists that are brought to the examination or produced ahead of time. The insurance company may even claim that if the policyholder does not comply, he or she may be in violation of its duty to cooperate with the investigation.  For one, a policyholder does not have to appear for an examination on the day or time demanded by an insurance company. Policyholders have lives – jobs, children, and responsibilities. The most important thing a policyholder should do is stay in active communications with the insurance company. When it comes to scheduling the examination, we recommend first retaining an attorney to walk you through the specifics of your claim and communicate with the insurance company on your behalf. However, at a minimum, you should schedule your examination well enough into the future to gather the documents requested by the insurance company and review everything you need to be familiar with the claim. I’m often asked why does an insurance company gets to take an examination under oath? The right to take an examination under oath stems from the language in an insurance policy, which is a binding contract. Courts have repeatedly upheld an insurance company’s right to take an examination under oath as a contractual right that the policyholder agreed-to. The terms and conditions in the insurance policy must govern the relations between the insurer and the insured. Because an examination under oath is based on a contractual obligation, courts have ruled that the U.S. Constitution’s Fifth Amendment right against self-incrimination does not apply and that an insured must respond to questions that may implicate the insured in criminal activity. If the insured refuses to answer questions, the insurance claim may be denied. Most insurance policies contain a provision stating that an insurance company can take the examination under oath of the policyholder to investigate a claim. Some policies may require the insured to have others with knowledge of the claim to also submit to an examination. Examples of others who may have knowledge of a claim contractor, public adjusters, and residents. From the insurance company’s standpoint, these individuals may have knowledge about certain aspects of the claim. However, the policyholder ultimately can’t force someone else to sit for an examination and many insurance companies use this as a tactic to intimidate policyholders. Indeed, many insurers think the policyholder will cave in if the insurance company begins a wide-reaching investigation. It is very much likely that the insurance company is investigating the claim so aggressively because the case has tremendous value and this is how the insurance company can leverage you into taking a lowball settlement. Courts have struggled...

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The Direct Action Statute and Collateral Source Rule Live On

| Read Time: 2 minutes

Recently, the Louisiana House of Representatives passed House Bill 372, a major bill that its proponents claimed would reduce auto insurance rates. However, the proposed legislation was all but rejected on May 7th, after an in-depth review by the Louisiana Senate Judiciary Committee. The committee raised strong concerns that not only would the bill fail in achieving its goal of lower insurance premiums, but that the bill also clearly favored insurance companies over consumers. The legislation, which had wide support by insurance companies, sought, amongst other things, to (1) end the collateral source rule and (2) eliminate direct actions against insurance companies. The legislation also proposed reducing jury thresholds and extending the prescription period to file a personal injury claim or tort action to two years. While lowering insurance rates should be a priority in Louisiana, the proposed legislation sought to fundamentally alter insurance litigation in a way that clearly favored insurance companies. Ending the Collateral Source Rule The collateral source rule is a legal rule that prevents a defendant (often insurance companies) from introducing evidence that a plaintiff has received payment from a third party. For example, a defendant in a civil action cannot offer any evidence at trial regarding the payment of the plaintiff’s medical bills or other insurance payments made for the plaintiff’s benefit. The purpose of the collateral source rule is so that a defendant can be held financially responsible for the full scope of damages they have caused. Eliminating Direct Action The Louisiana direct action statute allows a plaintiff to sue a third-party’s insurer directly to recover damages under an insurance policy. For example, if you file a personal injury action, the direct action statute allows a plaintiff to sue both the defendant and its insurance company. Opponents of the direct action statute claim that a jury is more likely to award more money if an insurance company is named as a defendant. Proponents claim the law simplifies the recovery process for individuals with claims covered by an insurance company. It also ensures a jury will award the full scope of damages caused by the defendant. From our experience, both the collateral source rule and direct action statute are important legal tools in Louisiana that are aimed at ensuring individuals and businesses are adequately compensated by insurance companies for their losses. Contact Us Today If you have questions about the collateral source rule or direction action statue, contact our team today to speak with one of our experienced attorneys. We offer free consultations.

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