The insurance company made an error in processing the first claim, overpaying the policyholder due to not applying the 50% copay as per the policy. Now, they intend to recover the overpaid amount by deducting it from the second claim. The policyholder has not been provided with a detailed explanation yet. The insurance policy is a corporate group policy involving an insurance broker, TPA, and the insurer. The policyholder seeks advice on whether the insurer can legally adjust the amount from the second claim and if there are any legal grounds to demand a 100% settlement of the second claim.
Experts suggest that the insurance company can legally recover the overpaid amount through a process called recovery, as the policyholder is not legally entitled to more money than what was agreed upon in the contract. The settlement letter is not a superseding document to the contract. The policyholder can raise a complaint with the ombudsman and escalate it to IRDAI grievance. However, it is the policyholder’s duty to return any excess payment received, and the insurance company may decline covering the policyholder in future renewals if they persist with not returning the overpayment.
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