What to do abotu overpayment on home insurance claim?

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On our homeowner’s policy, we were overpaid by $7-9,00, due to the insurance company paying with individual checks the according to them, paid again in a lump sum, when the contractor submitted a estimate for repairs.

Then we received a letter detailing the error, in their opinion, which didn’t add up, then demanded repayment. I am so confused. WHat should we do?”

Asked January 4, 2017

1 Answer


I realize the statement your insurance company sent you was confusing. The fact is, they did overpay you in the amount of seven to nine thousand dollars on you homeowners claim. You first need to figure out exactly how much you were over paid to the penny. This is not free money and it legally must be returned to your insurance company. They paid what was due you for your claim.

Insurance errors do happen but if you fail to pay back the money within a period of sixty days from the time you were aware of the situation, you are risking some severe consequences. Your insurance company can file a lawsuit against you to get their money back. You will also face the possibility of substantial fines. In some instances, jail time has been a penalty in similar situations.

The best way to look at the situation is if the roles were reversed. Think of how you would feel if you overpaid someone by accident and they would not pay you back. You would most likely be angry and upset because it was your money. Insurance company rates can become exorbitant if they have too many losses. In this instance they are in the right and yes, you do need to pay back the overpayment.

You do have the legal right to hire a lawyer, but chances are the legal fees would amount to a lot more than the overpayment.

Answered January 5, 2017 by karen

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