Do I Have to Pay More Money if the Insurance Company Made a Mistaken Payment Error?
Full Question:
Answer:
The term you are referring to sounds like detrimental reliance. Detrimental reliance must be shown to involve reliance that is reasonable, which is a determination made on an individual case-by-case basis, taking all factors into consideration. Detrimental means that some type of harm is suffered.
Typically, when a person makes a mistaken payment to another and the other person knows or should have known she was not entitled to it, the money may be reclaimed. The court may find that a party should have known of the mistake despite the acceptance. For example, if it was grossly disproportionate to other payments, the court may find the other party should have known of the mistake. In some cases, a court will apply the legal theory of estoppel if a person acts to their detriment in reliance upon the assurances or promises of another. For example, if the funds were spent and unable to be returned, the court may not require repayment under equitable notions of fairness.
