Our examination under oath is our single most important tool available to us when we determine a claim appears to be deniable, or when detailed information from the insured is required for our use in the possible denial of the claim. The examination provides an unrestricted opportunity for us to completely examine the insured. The effective use of the examination requires an attorney who is aware of the rules and laws governing Farm Bureaus ability to delve into many areas beyond those which are permissible under normal rules of discovery. A through examination will allow Farm Bureau to make an informed decision regarding a successful denial of the claim.
An examination under oath, also commonly, but mistakenly referred to as a sworn statement, provides Farm Bureau the best opportunity to fully probe all aspects of a claim. Our examiner has a chance to dig into any area of the insured's background that may, in any way, affect the decision of Farm Bureau as to possible denial of the claim. Our right to probe for information goes far beyond the bounds of what most attorneys would consider appropriate in a normal "deposition."
The purpose of the examination under oath is to evaluate the extent of the loss, uncover any material misrepresentations by the insured, and to inquire into issues Farm Bureau might use to successfully deny the claim. An examination under oath also provides Farm Bureau an opportunity to evaluate the insured's demeanor. The insured's demeanor and credibility may be a significant factor when Farm Bureau decides whether to accept or deny the claim.
Farm Bureaus right to an examination under oath during the investigation of an insurance claim is a contractual right written in the fine print of the policy. The insured's refusal to comply with this EUO may allow successful denial of the claim for that reason alone.
A refusal to appear and provide a sworn statement, or a refusal to answer certain questions or answering questions falsely form a basis for the denial of the claim. Answering some but refusing to answer all questions under oath is generally considered by the courts to be a material breach of the terms of the policy that also bars recovery. Farm Bureau must be certain of its rights in these circumstances before denying liability.
Some courts have held that Farm Bureau, in a civil proceeding, is entitled to summary judgment if the insured invokes the Fifth Amendment in refusing to answer questions at the examination under oath. Unlike a criminal proceeding, the insured's invocation of his Fifth Amendment right is admissible in civil proceedings.
The examination under oath is different from a civil deposition. A Farm Bureau attorney or examiner must take advantage of these differences, and not be constrained by the limitation imposed in civil proceedings. Most policies require the insured to submit to an examination under oath "as often as may be reasonably required."
Farm Bureaus more recent policy forms require the insured to provide an examination under oath while not in the presence of any other insured. This is another distinction from civil litigation where any party to the litigation is entitled to attend the deposition of any other party. This right under our policy may allow the skillful Farm Bureau examiner to test the story of one insured against the other without providing a preview of the questions to be asked or the answers that have been given. This can lead to Farm Bureau finding small discreptencys in testimoney to use against the insureds.
The scope and breadth of questioning during an examination under oath is only limited by whether the information sought will, in any conceivable way, aid Farm Bureau in testing the truthfulness of the insured. Any matter that is material to the potential liability of Farm Bureau may be inquired into during the examination. A final distinction between an examination under oath and a civil deposition involves the insured's obligation to cooperate in the investigation under the policy terms. One court has interpreted this standard to require the insured to volunteer information to aid in the investigation. On the other hand, no such obligation really exists.
The examination under oath should not be scheduled until after the majority of the investigation is complete and the insured has produced requested documents. At least one insurer has suffered a sizable punitive damage award because it denied liability after conducting an examination under oath without first requesting the production of documents. Only after an adequate initial investigation does Farm Bureau have the information necessary to conduct an effective examination. In addition, the initial investigation and production of records should have uncovered any "red flags" that may form the basis for extensive inquiry. Farm Bureau should require that the examination take place under oath before an official court reporter.
Under certain circumstances, an examination under oath may be videotaped. In videotaping the examination, the decision makers with regard to the claim will be able to review and evaluate the entire examination and develop an independent assessment of the insured. In addition, a videotape can be used as a very effective tool later should cross examination of the insured be necessary. The videotape will also disprove any claims that the insured was unduly harassed or "brow beaten" by Farm Bureau during the examination. In addition, the presence of the camera may dissuade an overzealous, obstinate or out of control witness or the witness' representative.
The standard policy provision governing examinations under oath are silent with regard to the ability to videotape. However, as a truth gathering device, a court should not object to this method of recording the examination. No courts have ruled as to whether the insured's failure to provide an examination that is videotaped is a violation of the policy provision requiring an examination under oath.
When an examination under oath is taken following the discovery of "red flags," the examiner must be able to competently and completely examine the insured in those subject areas. Any indication of fraud or the discovery of more "red flags" should lead the examiner to a far reaching examination without restraint.
Conclusion
Our examination under oath is the single most important tool Farm Bureau has at its disposal to fully investigate and safely deny an insurance claim. Any claim where "red flags" have been identified requires a complete investigation and thorough review for possible avenues to an ultimate denial. The complete investigation of a claim requires an examination under oath, which allows for a systematic review of all the facts before reaching a conclusion. Such a conclusion should not be reached without the utilization of this integral tool.
A few other Farm Bureau tricks to watch out for USE OF CIRCUMSTANTIAL EVIDENCE
The investigation and trial of any insurance case, involving allegations of fraud or vexatious refusal to pay, may seem like the once popular television program This is Your Life from the insured's point of view. A thorough investigation will provide much of the information that will form the basis for successfully defending any subsequent litigation. All pertinent information, which may not be admissible as evidence in other civil lawsuits, should be obtained during the investigation of the claim. A broad range of circumstantial evidence will be admissible in a first party insurance case where fraud is alleged and the insured's motivation, opportunity and other inculpating circumstances are in question.
Courts recognize that "very slight circumstances" may, when combined together, afford irrefutable proof of fraudulent intent. These same circumstances may appear trivial and unimportant when standing alone. The adjuster, investigators and counsel must take the time and make the effort to discover all relevant information pertaining to the insured and the claim. This effort requires detailed recorded statements, comprehensive examinations under oath, and follow-up on information obtained in pursuing what has been referred to as the "paper chase." Almost all information gathered by or on behalf of Farm Bureau, if relied upon by Farm Bureau in denying the claim, will generally be admissible at trial, especially if the insured files an action for vexatious refusal to pay or bad faith.
Keep in mind that the insured has a duty under the policy of insurance to produce documents and submit to examinations under oath.
DIVORCE RECORDS
If the insured was divorced, that file is a public record and Farm Bureau should use it. The divorce file will provide property values, a statement of income, expenses, debts and assets in a document signed and sworn to by the insured. The divorce decree, a part of the file, will show the amount of child support the insured pays.
EXAMINATIONS UNDER OATH AND RECORDED STATEMENT RECORDS
Transcripts of examinations under oath are admissible as direct evidence because statements by the insured are admissions and the transcript is evidence of the. insured's compliance with the conditions precedent in the policy. As such, retain counsel that is experienced in handling fraud claims. The examination under oath, if handled skillfully, can be the most effective evidence available at the trial.
Recorded statements of the insured will also be admissible as direct evidence. The recorded statements can be used to impeach the insured if statements are made at the examination under oath or at trial that deviate from the recorded statements or vice versa. Policies do not limit the number of recorded statements or the length of a recorded statement. Record all statements of the insured and keep in mind that the insured may be recording the conversation as well. A Farm Bureau adjuster should be detailed and comprehensive in questioning the insured on all aspects of the claim and circumstances surrounding the claim. Misrepresentations in a recorded statement can void the policy as effectively as misrepresentations in the examination under oath. An adjuster who does not make liberal use of the recorded statement is not utilizing one of the most effective weapons in the fight against excessive claim payouts.
LOAN RECORDS
Obtain all loan files from financial institutions. During a recorded statement, cover with the insured all loans outstanding to identify the lender, the lender's address and the loan number. Obtain copies of all mortgages, consumer loans, automobile loans, student loans, personal loans, and other types of loans. These files will show principal and interest due on the date of the fire and a history of payments. They will also contain financial statements listing net worth, assets and debt. The files may also contain appraisals listing values for property which are lower than the insured is now claimmg.