Refund

What Does Refund Mean?

A refund is a financial transaction in which one party returns a specific amount of money to another party. Refunds typically occur when a party fails to fulfill an obligation or promise. In the context of insurance, a policyholder may receive a refund for a payment they made that the insurer was actually responsible for covering.

Insuranceopedia Explains Refund

An example of a refund could be a policyholder receiving $150 from their insurer after being mistakenly charged the full amount for a doctor’s visit. In this case, the policyholder was only responsible for a co-payment of $20. Mistakes do happen, and refunds can help balance out expenses when charges are applied in error or when services fail to meet expected standards.