In the first of a regular column we get to the bottom of some of that complex financial
jargon so you know where you stand. This week we delve into legal expenses insurance.
The economic squeeze continues, and with so many people finding it difficult to make ends meet, it can be hard enough to cover the bills and a weekly food shop.
But what if you find yourself in need of legal help?
These aren’t situations you plan for, let alone save for, and going directly to get help from a solicitor can be too expensive for many people. Legal expenses insurance could be the answer.
We chatted to James Henderson, managing director at DAS UK Group , for the basics.
What is legal expenses insurance?
Put simply, if you find yourself in a legal dispute, legal expenses insurance could cover your costs, even if your case goes to court.
How much does it cost?
In the UK, legal expenses insurance is typically bought as an optional ‘add-on’ to other types of insurance such as home and motor, so you don’t generally see it priced as a product on its own.
If you choose to include it when you buy or renew your home or car insurance, it will typically cost between £20-£60 a year for individuals, although that will vary depending on who you buy it from and how much cover it gives you.
How do I know if I already have it?
Research has shown that while around 16 million people have legal expenses insurance, a third of them don’t realise this.
You need to check your insurance policies, in particular home contents insurance, buildings insurance and car or motorcycle insurance.
Also, it’s possible that you may have elements of this cover included in other packaged products, or as a benefit of your employment contract at work.
It may be a slightly arduous task but it’s important to check all of these documents as it could end up saving you money on your legal bills.
Of course, as with any insurance product, if you are in any doubt whether you already have the cover, or would like to add it to an existing insurance policy, then speak to your insurer to be sure.
What are the benefits?
Government figures show legal aid has fallen sharply from £2.5billion in 2010-11 to £1.6bn in 2016-17 following changes to the system in 2013 which make it more difficult than ever to access reasonably priced justice.
As well as covering your legal costs, legal expenses insurance can also give you access to a legal advice helpline, with support from a team of professionals who can guide you through any personal legal issue, help you understand your rights and offer advice on taking any further steps.
What types of things can I use it for?
It is designed to help with common legal issues such as:
- Unfair dismissal, or discrimination at work
- Injury from an accident that was not your fault
- Disputes involving faulty goods or services
What does it not cover?
- Issues that started before you bought the policy
- Legal costs paid out before your claim is accepted
- Claims where the likelihood of success or ‘reasonable prospects of success’ are professionally assessed as being less than 51% at any time during the life of your claim
If you have legal expenses insurance, don’t forget that – as with any insurance product – a low price will probably be reflected in the quality of cover it offers, so it’s really important to check the terms and conditions for full details of the cover, limitations and any exclusions.
If you don’t like what you find, speak to your insurer about your options.