Does an Examination Under Oath Mean Your Insurer Suspects Fraud?

Nobody tells you why. The letter demanding an examination under oath cites the conditions section of your policy and lists the documents to bring, but it does not say what the insurance company thinks happened. Policyholders tend to read it one of two ways, as a formality or as an accusation, and either reading can be wrong. Some examinations are routine steps on large or complicated claims. Many are not. They follow a referral to the insurer's special investigations unit, and the examination is where the company tests a suspicion it has not shared with you.

Knowing which situation you are in changes how you prepare. It does not change how you answer, because the answer is always the truth. What follows explains what sends a claim down this path, what the fraud clause in your policy says, and where policyholders with valid claims get hurt.

Why do insurers send a claim to an examination under oath?

Florida requires insurers to maintain anti-fraud investigative units, and adjusters are trained to refer claims that show certain indicators. The common ones: a loss soon after the policy began or the coverage was increased; a claim that is large compared with the policyholder's means; signs of financial strain; a history of prior claims; late reporting, or no police report on a theft; missing receipts for expensive items; documents that appear altered; accounts that differ among family members, contractors, and the insured; a fire with no clear origin; a burglary with no forced entry; a contractor or adjuster whose name appears across many claims. None of these proves anything. Every one is consistent with a valid claim. The examination is the tool the insurer uses to sort one from the other.

What does the policy's fraud clause say?

Most property policies provide that there is no coverage for an insured who, before or after a loss, intentionally concealed or misrepresented a material fact, engaged in fraudulent conduct, or made false statements relating to the insurance. Notice the reach. A false statement about one item can void the entire claim, not only the part it touched. Under some policies, one insured's misconduct affects the others. And "material" does not mean decisive; it means something that would matter to a reasonable insurer investigating the claim, even if it would not have changed the result. This is why inflating the value of a single item is among the most expensive things a policyholder can do.

How do truthful policyholders get into trouble?

By guessing. They guess at purchase dates, prices, and where an item was bought. They round up. They list items from memory that turn out to have been somewhere else, or to have belonged to someone else. They sign an estimate a contractor or public adjuster prepared without reading it, and then cannot explain its numbers; Florida courts have held policyholders to estimates they adopted as their own. They forget a claim made years ago at another address, which the industry's databases have not forgotten. They minimize money problems out of embarrassment. They contradict a recorded statement given months earlier. Each of these can be innocent. In a transcript, several together look like a pattern. The protection is preparation: reading every form, inventory, and statement already submitted before answering a single question under oath.

Why are they asking about your finances and your past?

Because motive and history are part of a fraud inquiry, and Florida courts generally allow an insurer to explore them where they bear on the claim. Expect questions about income, debts, lawsuits, the status of your mortgage, business troubles, earlier claims, and sometimes criminal history, along with requests for bank statements and tax returns. There are limits. The requests must be reasonably related to the claim, and a lawyer can object and negotiate, for example by limiting statements to the months around the loss. A flat refusal to answer relevant questions is risky, because the insurer may treat it as a failure to cooperate. Drawing that line is a judgment made question by question.

Can statements on the application come back too?

Yes. A Florida statute allows an insurer to deny a claim or rescind a policy over a misstatement or omission in the application when it was material to the risk, in some circumstances even when it was unintentional. Examiners often walk through the application line by line: prior losses, prior cancellations, whether the home is owner-occupied or rented, business use, the age of the roof, who lives in the household, security devices. An investigation that began with a claim can therefore end with the insurer returning the premiums and declaring the policy void from its first day. Read the application before the examination, and bring any errors in it to your lawyer first.

What if something in your claim was wrong?

Correct it, before the examination or at it, with a lawyer's help. Withdrawing an item you cannot support, fixing a date, or amending an inventory reads very differently when the policyholder does it voluntarily than when the examiner exposes it. Timing is the whole difference. Insurance fraud is also a crime in Florida, and insurers refer files to state investigators. Anyone with a real concern about that should speak privately with a lawyer before testifying, because the choices available at that point affect both the claim and the person, and they call for individual advice.

What happens if the insurer denies the claim for fraud?

The denial letter will cite the concealment or fraud provision. That is the insurer's position, not a verdict. In court, the insurer carries the burden of proving the defense, and for statements made after a loss, Florida appellate courts have generally required proof of an intent to mislead. Policyholders challenge these denials through the notice Florida requires before a property insurance suit and then through a lawsuit on the policy. Many fraud denials rest on inconsistencies that have ordinary explanations, and the outcome often turns on whether those explanations made it onto the record at the examination.

Salomon Smith PLLC represents Florida policyholders whose claims are under investigation, at examinations under oath and in the disputes that follow a denial. If your insurer has demanded an examination, call (305) 297-1018 for a free consultation, or learn more about our insurance coverage practice.

This article is for general informational purposes only and is not legal advice.