You are here: Home - Insurance - News -

Should you add legal expenses cover to your home or car insurance?

Written by:
Legal expenses cover can be bought alongside your car or home insurance to cover the cost of legal action brought by you or against you.

For car insurance, this would cover you if you needed to sue another road user for negligent driving for example, or protect yourself against false claims by another driver.

Legal expenses cover for your home would cover you for legal costs relating to your home or your employment. For example, it could help if you are wrongly dismissed from your job, or if you have a property dispute.

The maximum you can claim is usually £50,000 to £100,000 and the cover typically adds around £25 to the annual cost of home or car insurance.

There are limitations: As with any insurance, there is a chance that insurers won’t fund the case. In general, they will only fund cases where there is a 51% chance of winning. Hiscox, for example, says it will not support, ‘any legal action where reasonable prospects of success do not exist at any point during the claim’.

If it’s your word against someone else’s, the claim may not be supported.

Insurance companies may also withdraw funding if they feel that a ‘reasonable’ offer has been made. Equally, you need to cooperate with the process at all times. Most policies also require you to use an approved solicitor. Hiscox is more flexible, saying that people can use alternative solicitors but they will only pay out the same as an approved solicitor would have cost. In other words, you can’t expect them to fund top legal counsel.

Claims need to be timely. If too much time has passed since the incident, or the amounts involved are too trivial, the insurer may not pay out.

As insurance goes, it doesn’t feature regularly on the Financial Ombudsman’s list of complaints. It attracted 715 complaints last year, out of 321,287 for insurance products generally.

Plenty of people will have legal insurance already and many may not realise it, either because they ticked the box with their home or car insurance, or because they have it through their employer. It is worth checking.

So is it worth it? The circumstances in which you would need it are relatively rare, but when you do, the costs involved are often very large. You may be able to get free advice through a trade union or through Citizens Advice, but nothing beats having a pot of cash to support a claim.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
buying a car
The truth about 0% car finance deals

More people than ever are using some form of finance to purchase a car, and dealerships are able to offer...