Refunded by Mistake

[Bkingdesign]

My question involves insurance law for the state of: GA.

I was issued a refund about 6 months ago by my home owners insurance company. $700-$800. Just recently they reached out saying it was by mistake and they were requesting that we send the money back. We ignored it because that money is gone and we don’t have it. Now they have billed us for the amount. Is this legal and are we legally obligated to return the money if it is their mistake and it was so long ago?

[flyingron]

Yes. They certainly can.

[adjusterjack]

I was issued a refund about 6 months ago by my home owners insurance company. $700-$800.

Did anything come with it explaining why a refund was generated? Did you ask about it? That's a lot of money to come right out of the blue.

Just recently they reached out saying it was by mistake and they were requesting that we send the money back.

Was there an explanation as to why it was a mistake?

We ignored it

Always a bad idea, regardless of why.

that money is gone and we don’t have it. Now they have billed us for the amount. Is this legal and are we legally obligated to return the money if it is their mistake and it was so long ago?

It's legal. The law doesn't allow you to profit from somebody else's mistake. Unless details suggest otherwise, they are entitled to the money. You might be able to set up a payment plan.

PS: Never spend a windfall without questioning it.

[llworking]

My question involves insurance law for the state of: GA.

I was issued a refund about 6 months ago by my home owners insurance company. $700-$800. Just recently they reached out saying it was by mistake and they were requesting that we send the money back. We ignored it because that money is gone and we don’t have it. Now they have billed us for the amount. Is this legal and are we legally obligated to return the money if it is their mistake and it was so long ago?

I am assuming that it was an escrow refund. The law requires mortgage companies to refund escrowed money if it exceeds what is required to cover homeowners insurance and property taxes. It is certainly possible for a mortgage company to make a mistake and refund escrowed money that should not be refunded.

However, its unusual for your mortgage company to be handling things the way that they are handling this. Generally, if there is not enough money in escrow to handle the payments needed the mortgage company would normally just raise your monthly payment by enough to cover the needed escrow money in the current year. It's a bit odd for them to attempt to bill you all at once. It would not be unusual for them to give you the option to pay it all at once, but its unusual for them to attempt to require it.

[adjusterjack]

Good point. Though I have known mortgage company to bill all at once for a large shortfall.


So Bkingdesign, did the refund check come from the insurance company or the mortgage company?

Who is billing you now, the insurance company or the mortgage company?

[pg1067]

Let's say that, by mistake, you accidentally paid $1,600, instead of $600, in premium and didn't discover it until 6 months after the fact. I guarantee you'd expect the money back and wouldn't think 6 months was "so long ago." Right?

When you received the "refund," what was the stated purpose of the refund? Were you expecting a refund? If not, did you call to find out why you received a refund you weren't expecting? What I'm trying to figure out is whether you knew or should have known that you received the money by mistake.