Am I responsible to pay a bill that was accidently debited to somebody elses account and they have been paying it?

UPDATED: May 27, 2009

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Am I responsible to pay a bill that was accidently debited to somebody elses account and they have been paying it?

I’ve had auto insurance with the same company for over 10 years. I assumed the payments were being made because each month I would see that my premium was being paid. Apparently when the company set up the automatic payments – they put in the wrong account and were billing another person. This person just figured it out and is now being refunded the money. The company now tells me that I owe $12,000 in back payments. Am I bound by law to pay?

Asked on May 27, 2009 under Insurance Law, Texas


B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

You are certainly going to have to pay back part of it; the question is likely to be how the statute of limitations affects this unusual case.  There may be special rules that affect this, because insurance is involved.  I'm not a Texas lawyer, but my research suggests that ordinarily a suit for fraud or breach of contract has to be filed within four years.  However, there is something called the discovery rule, which in some cases allows the start of the limitations period to be delayed where the harm wasn't known, and reasonably could not have been known, to the party making the claim;  I would expect the insurance company to try and make use of this, if you fight them.

It's an interesting legal question, whether the discovery rule fits this case -- meaning you should not be taking on the insurance company's lawyers by yourself.  You need to discuss this case with an attorney in your area, and I'd do it very soon; it may be possible to negotiate a settlement and that is almost always better than a lawsuit.  One place to find a lawyer is our website,

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