If You Have A Fire Don’t Get Burned By: Peter L. Obremskey and Michael L. Schultz

VII. Special Investigations Unit (SIU).

If, after taking the statement under oath and conversing with the fire or police authorities, the insurance adjustor calls in the Special Investigations Unit (SIU), look out. It’s time to seriously begin protecting your own interests. The insurance company’s SIU investigator is there for the sole purpose of attempting to find the cause and origin of the fire to be the insured and to deny coverage. That is the sole purpose of his existence. If not before, it is now time for the insured to hire a cause and origin expert of his own to obtain a balanced approach to determining the cause and origin of the fire. In order to do so, it is important that the fire scene remain intact and no efforts be made for cleanup until your investigator has an opportunity to view the fire scene. There are many competent cause and origin investigators available.

The SIU investigator may very well want to take a supplemental recorded statement from the insured. Once again, it is incumbent upon the insured to do so as cooperation is required by the contract. Failure to do so in and of itself may result in the denial of the claim. The SIU investigator may also want to have the insured be subjected to an examination under oath. The examination under oath, again, is provided for in the insurance contract. It is mandatory for the insured to appear at the examination and answer all questions. In spite of the fact that many attorneys are apprehensive about having their clients submit to these examinations, it is ill-advised to tell your clients not to do so. The insurance contract not only requires it, it dictates the terms and conditions of the examination under oath. It stipulates among other things that even though the homeowner and his wife may be the insured, the insured and his wife will be excluded from the statement under oath as the company may require that they be taken separately without the attendance of one at the statement under oath of the other. It may not seem fair, may not seem right – but the contract calls for it and you’d better comply with the terms of the contract or the claim will be denied. Classic examples of unfortunate advice given an insured by his attorney are the cases of ­­­­­­Morris v. Economy Fire & Casualty Co., 848 N.E.2d 663 (2006); and Knowledge A-Z, Inc. v. Century Insurance Co., 857 N.E.2d 411 (2006).

The insurance company by this time will have hired an attorney to conduct the examination under oath. They are lengthy, can go on for hours, and are a very detailed inquiry, even to a greater extent than most depositions. In anticipation of an examination under oath, expect a long letter from the insurance company’s attorney outlining what they want you to provide at the time of the examination. This may very well include tax returns, receipts, bank statements, checking accounts, credit card records, telephone records, utility records, to name only a few in this onerous list. You can also expect to receive from the insurance company requests for authorizations to obtain many of these records from their sources. In short, an investigation into a fire is invasive, completely denudes you of any privacy, and makes your financial world very open to the insurance company and the insurance adjustor. And there is little you can do about it as the insurance company has the right to determine what is necessary in its investigation to find out if it indeed has coverage. The examination under oath will be transcribed, submitted to the insured for signature and then sent to the insurance company along with the attorney’s analysis of the claim.

At the conclusion of this process, the insurance company should be in a position to make a determination as to whether or not they are going to afford coverage. They should not be allowed to dilly-dally through this process, as will be explained below.

(Part 4 of 7. Part 5 will be posted on 6/7/10)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.