Legal Expenses cover is offered as an add-on with most home and car insurance policies, but getting it without checking what it covers and whether you'll be able to claim is a mistake. Here's how to work out whether it's worth the extra cost.
Legal expenses cover is designed to provide help and financial assistance if you become involved in a legal dispute.
For example, if you need to make a personal injury claim, get involved in an employment dispute, are hit by an insured driver or get sued.
It's pushed as an 'essential' add-on by most home and car insurance policies, but if you're not careful you could end up paying extra for cover that you'll never claim on.
With insurance costs rising it makes sense to avoid paying for unnecessary extras wherever possible.
Here's how to work out whether legal expenses cover is protection that you can't do without:
What exactly is legal expenses cover?
There are two main varieties of legal expenses cover and it's important to be aware of the distinction when you're looking at whether a policy add-on is worth paying for:
Before the event cover
Most legal expense policies give you cover that will assist you if you need to make a claim in the future - be it a personal injury claim or after car accident.
They are unlikely to cover any legal disputes you're currently embroiled in, or any events that occurred before you took the policy.
It’s this type of cover that is often added to home and car insurance policies as an added extra.
After the event cover
You can take out an insurance policy that covers you against losing a legal case you're currently involved in, or for a legal claim that you're about to pursue.
This is considered to be after the event cover, as you would only need to consider this type of insurance if you were already pursuing a legal case against someone, were being sued by someone, or had experienced an event that you wanted to claim for.
This type of legal expenses cover is not usually available as an insurance policy add-on but is instead offered by specific insurance brokers at a significantly greater cost.
Is it worth paying for?
Before you add legal expenses cover to a home or car insurance policy you need to look at what's covered and consider whether you're ever likely to claim on it.
While it is impossible to predict what your future holds, you should look at the specific instances that are covered by a policy and think about both whether you're ever likely to be in a circumstance to invoke the protection. For example, if you are retired then it is unlikely that you would be involved in an employment law dispute.
You'll also need to think about whether you're likely to want to take legal action if something unfortunate did happen. For example, can you ever see yourself pursuing a personal injury claim?
If you think that legal expenses cover is reassurance that you'd find valuable it's important to check the details of any policy you're considering to make sure that you actually get the protection you need.
Here are a few points to consider:
1. Check you don’t already have it
Before you add legal expenses cover to an insurance policy you first need to check that you don’t already have it. It's pointless paying for it twice unless you'd get additional cover that you think you are likely to use.
Look at your car and home insurance policy’s terms and conditions to check whether legal cover is included in your plan, and if so, the level of cover that you currently have.
Some package bank accounts may also include legal cover so if you pay a monthly fee for your bank account make sure to check if it is already included.
2. Check the limit on offer
Most policies will have a standard limit on the amount of legal cover they will provide.
Before you take out the policy you need to check exactly what this upper limit is; as a guide £50,000 is the average amount offered by insurance providers.
3. Find out exactly what it does & doesn’t cover
When deciding whether you need legal expenses cover you should check exactly what a policy offers.
Here are some of the most common policy features:
- Personal injury cover
This covers the cost of claiming for personal injury damages should you be injured by someone. - Employment disputes
This type of policy is designed to provide legal advice and assistance should you become involved in a contractual dispute at work or need to pursue legal action against your employer. This could include cases of constructive dismissal, redundancy or any other employment based legal case. - Tax enquiries
If you are subject to a full tax enquiry this cover will assist in the costs involved and provide legal advice if you need it. - Contractual disputes
If you have entered into a contract, such as a tenancy agreement or for goods or services and need legal advice then this type of cover will provide it. - Legal document preparation
Some legal cover policies also include a legal document writing service which checks documents such as wills and other contracts on your behalf.
As well as checking exactly what is included in a policy it's also important that you are aware of the areas that are excluded from each policy before you make a decision.
Most legal services policies do not extend their cover to include family law disputes, such as divorce or child custody hearings.
It is also likely that defamation and libel cases will also be excluded, so if you plan on selling your story to the papers this is worth considering beforehand!
Weighing up the pros and cons
Once you know exactly what is included from the legal cover policy and the cost involved you should carefully weigh up whether it represents value for money for your individual circumstances.
From this you'll be able to decide whether it's worth paying out for as an add-on.
