Legal Question in Insurance Law in California

What is undoubtedly happening is that your insurance company is conducting a fraud investigation. My guess is that they have already had you speak to several of their claims people, and also likely have asked you to make statements that they could record, although you were not under oath. (If they didn't get your permission to record, it may be that someone told the senior investigator or counsel who reminded the earlier folks that in California you must affirmatively be told you are being recorded and agree to that.)

As part of that investigation it is standard operating procedure to try to get you to make statements under oath, in an effort to help them create a defense to your claim -- whether by getting grounds to rescind the policy for material misstatements, or by getting admissions that they can try to use to show the claim is fraudulent or inflated or that you are failing to cooperate in their investigation, in contravention of an obligation under the policy. In fact by getting the statements under oath the company or its counsel may then try to further intimidate you by explicitly or implicitly threatening criminal prosecution for a false claim and/or perjury. If you don't agree to make a statement then they can claim non-cooperation and further horse you around. Heads they win / tails they lose. (As a former insurance company in-house lawyer and later as a senior executive, and now a lawyer for claimants, I have often seen what lengths some companies will go to avoid paying legitimate claims -- sometimes out of a legitimate belief that there has been wrongdoing, sometimes because the claims people have not been trained about proper procedures and regulations, or are being motivated to deny claims as a matter of practice to increase profits, or because some would-be dictator had a bug up his hind-parts, and even in some companies on some occasions that's the way the company does business.)

Taking 10 months to settle a claim seems like a very excessive amount of time already, and now this. If the company already paid something on the claim it may now be second guessing its payment and possibly will try to recoup. In short, you are being played like a fool in a game you don't understand where the consequences can be severe both in terms of the money involved on the claim, and often the far greater potential cost of having to defend yourself and face potential serious criminal penalties.

It's time for you to retain a lawyer and disclose to the lawyer the entire set of facts and circumstances. What you say to your lawyer is fully protected by the attorney-client privilege. What you say to their lawyer is grist for their mill. Your lawyer will then be in a position to advise you, and if appropriate serve as a buffer and get the claim paid. If your lawyer concludes that the company has been acting in bad faith, he or she can then sue the company not only to pay the claim they have delayed but also for bad faith, and then the recovery you could receive would be far greater than the dollar value of claim itself.

The above response is very good and thorough. Here is my $0.02: In a nutshell, the only time they ask for Examination Under Oath (EUO) is to either set you up for denial or cover their behind for delay in settlement. You MUST go to this thing with representation. Otherwise the insurance company lawyer will play you like a violin. You can't go to a gun fight without any weapon and come out in one piece. I sue insurance companies for bad faith all the time. So feel free to contact my office. 323-782-0099.