As public adjusters, you handle most claims without the need for your client to have to retain legal counsel; and that is a good thing. When a lawyer has to get involved in a claim prior to payment, the claim usually has some element of “noise.” “Noise” can consist of issues having to deal with a claim's cause and origin, coverage issues, and potential material misrepresentation.
In a typical claim where a lawyer has to get involved, the policyholder, with your assistance, submits a claim for coverage, and the insurance company determines it needs to be investigated, rather than setting the claim up for payment. When this occurs, the claim may be referred to the insurance company's Special Investigation Unit, or SIU. Once the SIU gets involved, further investigation takes place.
As part of that investigation, the insured may be informed the insurance company wants to take an Examination Under Oath, or EUO. An EUO is an opportunity for the insurance company's lawyer to ask questions of the insured regarding the claim and the insured's background while the insured is under oath. Along with the request for an EUO, the insurance company's lawyer will normally also request the insured to produce numerous documents, which may include bank records, credit card statements, tax returns, receipts, photographs and communications the insured may have had regarding the claim. So, on top of being traumatized as a result of having to deal with the stress of the loss itself, now the insured is being asked to produce all these documents that contain personal and private information and are not always easy to obtain. When being confronted with these requests, it can appear daunting, and an initial reaction from the insured may be a reluctance to cooperate.
Unfortunately, the insured has an obligation to cooperate with an insurance company's investigation, which includes participating in the EUO and producing the requested documents if available. And while there may be some restrictions on what the insurance company is entitled to, they are certainly entitled to take the EUO and are also entitled to receive documents that may be relevant to the claim. In addition, although the question of whether the insured has cooperated enough is normally a question reserved for a jury, that may not be the case if the insurance company has a good faith belief that the insured has committed fraud or made a material misrepresentation as part of the submission of the claim.
While an innocent insured may feel like they should not have an obligation to provide this level of cooperation, the safest course of action is to comply with these requests. At the end of the day, the goal is to ensure the insurance company pays the claim appropriately, and if that means participating in an EUO and producing requested documents, then so be it. If the insured does not cooperate, they risk the possible denial of the claim or unnecessary delay in payment of the claim. If you find yourself in this type of situation, it is recommended to have your client speak with an attorney so they can be counseled appropriately.