Refusing to Answer Questions at an EUO is Usually Not A Good Idea

Recently, it seems like I have been privy to a relatively high number of insureds asked by their carrier, following a loss, to submit to an examination under oath (commonly referred to as an EUO). The most common question I received was, “Can I just choose not to answer or attend?” Although the choice is ultimately the insureds and the ramifications of refusal vary by justification, when dealing with Arizona insureds, I generally advise against such blanket refusals.

Most insurance policies impose an obligation on the insured to cooperate with the post-loss investigation and the failure or refusal to comply with the obligation to cooperate with an EUO provision may constitute a bar to any recovery against the insurance company. Like most insurance-related items, it depends on the language used in the policy. A non-cooperation clause, if properly drawn, will relieve an insurer of its indemnification obligation regarding a non-cooperative insured.¹

The second-most popular question then follows, “So does that mean that the insurance company can ask me anything under oath?” An Arizona appellate court answered that question by stating:

In the context of the requirement that the insured submit to a sworn examination, it appears that the only limitation is that the questions be material to the circumstances surrounding the insurer’s liability and the extent thereof.²

In short, yes, provided that the insurance company can articulate a basis to show that the question is material and relevant to its investigation and potential liability.

Can an insured invoke his/her constitutional right to remain silent? The protection afforded by the Fifth Amendment has no application to an EUO.³ However, if requested by the insured, the carrier ought to explain the relevancy and materiality of its questions.⁴

An EUO can be a trap for the unwary, and insureds should be careful when submitting to an EUO. If unsure or uncertain, an insured should consult with (and/or retain) a knowledgeable insurance attorney before providing sworn testimony to the carrier.
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¹ Home Ins. Co. v. Balfour-Guthrie Ins. Co., 13 Ariz. App. 327, 328-329, 476 P.2d 533 534-535 (App. 1970).
² Warrilow v. Superior Court of Arizona for the County of Pima, 142 Ariz. 250, 253, 689 P.2d 193, 197 (App. 1984).
³ Warrilow, 142 Ariz. at 254, 689 P.2d at 198 (the “compulsion” to respond arose not from any governmental action, but rather solely from the terms of the parties’ contract).
⁴ Twin City Fire Ins. Co. v. Harvey, 662 F.Supp. 216 (D. Ariz. 1987).