STATUTORY OBLIGATION TO FIGHT FRAUD INCLUDES THE RIGHT TO EXAMINE PEOPLE CLAIMING NO FAULT INJURIES UNDER OATH
Apparent Staged Accident Requires EUO to Investigate Potential Fraud
Post 4995
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The trial court initially denied Allstate’s suit stating that Allstate failed to show good cause and did not cite any contractual provision compelling the Appellees to provide information in an examination under oath (“EUO”). Allstate argued that it had a duty to investigate suspected insurance fraud and that the Appellees had a contractual obligation to submit to EUOs.
In Allstate Property And Casualty Insurance Company v. Gloria E. Companioni; Isair H. Lubo-Rodriguez; and Mercedes H. Cervantes, No. 2023-CA-1012-MR, Court of Appeals of Kentucky (February 7, 2025) resolved the dispute.
The Court of Appeals of Kentucky vacated the trial court’s total denial of the petition and remanded the case for further proceedings. The appellate court found that the trial court overlooked contractual provisions allowing Allstate to conduct EUOs and binding precedent that permits inquiries into accident-related issues. The appellate court directed the trial court to reconsider whether good cause exists to allow questioning pertaining to medical treatment and solicitation, following the principles set forth in Deadwyler v. Grange Property and Casualty Insurance Company.
The appellate court’s decision emphasized the importance of allowing insurers to conduct thorough investigations, especially when there are concerns about potential fraud. The case highlights the balance between protecting claimants’ rights and ensuring that insurers can fulfill their duty to investigate claims thoroughly.
FACTS
Gloria Companioni was driving a car insured by Allstate which was in an accident with another car. Appellees Isair Lubo-Rodriguez and Mercedes Cervantes were allegedly riding in the car Companioni was driving when the accident happened. All three resided in Kentucky.
Four days after the accident, all three Appellees commenced care at Total Health Chiropractic and Rehab (“Total Health”). The next day (five days after the accident), Appellees submitted Personal Injury Protection (“PIP”) applications through counsel. Appellees requested reimbursement for medical treatment resulting from the accident and for any coverage available, including coverage for basic reparations benefits (“BRB”).
Allstate filed a suit for an EUO pursuant to Kentucky statutes.
ANALYSIS
Trial Court Erred in Finding Allstate Failed to Cite a Contractual Provision Which Required Appellees to Submit to EUOs
The trial court overlooked policy provisions relating to EUOs, but it also overlooked pertinent authority allowing inquiries into predominantly accident-related issues in EUOs. In sum, its total denial of the EUO petition cannot stand and must be vacated with the case remanded to the trial court for further proceedings.
The appellate court directed the trial court to consider its guidance in considering anew whether good cause exists to permit questioning about matters of medical treatment and/or solicitation via EUO and, if so, to establish any appropriate limits on such questioning.
The trial court’s total denial of the EUO petition was vacated and remanded for the trial court to issue a new order allowing an EUO at least regarding purely accident-related issues, to reconsider whether good cause exists to permit inquiries pertaining to medical treatment and solicitation, and to provide direction to the parties as to the permissible scope of inquiry.
ZALMA OPINION
Kentucky, like most states, requires insurers to maintain a Special Fraud Investigative Unit to help the state defeat insurance fraud and to protect every insurer doing business in the state from damages from fraud. Allstate, faced with an apparent staged accident sought to examine the parties claiming injury under oath in its effort to fully investigate a potential insurance fraud. The trial court refused but the Court of Appeals of Kentucky reversed requiring the trial court to approve the EUOs.
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Insurer’s Exclusion for Claims of Assault & Battery is Effective
Post 5250
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Bar Fight With Security is an Excluded Assault & Battery
In The Cincinnati Specialty Underwriters Insurance Company v. Mainline Private Security, LLC, et al., Civil Action No. 24-3871, United States District Court, E.D. Pennsylvania (December 16, 2025) two violent attacks occurred in Philadelphia involving young men, Eric Pope (who died) and Rishabh Abhyankar (who suffered catastrophic injuries). Both incidents involved security guards provided by Mainline Private Security, LLC (“Mainline”) at local bars. The estates of the victims sued the attackers, the bars, and Mainline for negligence and assault/battery. The insurer exhausted a special limit and then denied defense or indemnity to Mainline Private Security.
INSURANCE COVERAGE
Mainline had purchased a commercial ...
Marine Insurer May Dispose of Vessel to Avoid Waste
Post 5249
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In Western World Insurance Company v. The Estate Of Shawn Arsenault, No. 25-cv-13413-PGL, United States District Court, D. Massachusetts (December 17, 2025) the USDC was asked to resolve a marine insurance dispute after the sinking of the F/V Seahorse, a commercial fishing vessel, off Cape Cod on June 8, 2025. The vessel’s owner and operator, Shawn Arsenault, died in the incident.
Western World Insurance Company issued a hull insurance policy for the vessel. With no personal representative yet appointed for the estate, the insurer cannot determine the proper payee for the insurance proceeds.
The insurer paid for the vessel’s recovery and removal, and the vessel is now with a salvage company, incurring substantial storage fees. The insurer determined the loss is covered under the ...
Marine Insurer May Dispose of Vessel to Avoid Waste
Post 5249
Read the full article at https://lnkd.in/gfn_UHdp, see the video at https://lnkd.in/gDWVccnr and at https://lnkd.in/gv9nsBqk, and https://zalma.com/blog plus more than 5200 posts.
In Western World Insurance Company v. The Estate Of Shawn Arsenault, No. 25-cv-13413-PGL, United States District Court, D. Massachusetts (December 17, 2025) the USDC was asked to resolve a marine insurance dispute after the sinking of the F/V Seahorse, a commercial fishing vessel, off Cape Cod on June 8, 2025. The vessel’s owner and operator, Shawn Arsenault, died in the incident.
Western World Insurance Company issued a hull insurance policy for the vessel. With no personal representative yet appointed for the estate, the insurer cannot determine the proper payee for the insurance proceeds.
The insurer paid for the vessel’s recovery and removal, and the vessel is now with a salvage company, incurring substantial storage fees. The insurer determined the loss is covered under the ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
