First-party insurance is insurance that has been purchased by an individual through an insurance broker. In such cases, if an insurance company is found to have unreasonably denied or delayed payment of a claim, the individual can file a lawsuit for punitive damages, and pain and suffering, in addition to medical expenses. Furthermore, in cases of disputes involving first-party insurance, the individual can file a lawsuit as soon as the claim is denied, rather than appealing the decision (as must be done in ERISA insurance claims).
Under ERISA (Employee Retirement Income Security Act (ERISA) insurance - which is insurance provided by an employer - the individual must file an appeal of the denial before a lawsuit can be filed. The claimant can also only file a claim for attorney’s fees and medical coverage. Punitive damages and pain and suffering are not included in ERISA insurance claims.
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Sometimes, insurance companies question a medical diagnosis - including a diagnosis of disability - and require the claimant to attend multiple medical appointments. Or, they may dispute the diagnosis saying the patient’s files do not support the diagnosis.
Whatever the reasons or means behind denying or delaying payment of a claim, such situations lead to undue stress and hardship for insurance claimants, not to mention greatly increased expenses to pay for necessary medical attention. Having to fight an insurance company while also dealing with the stress of health issues - and, in many cases, not being able to work - is a lot for any individual to deal with.