What is legal expenses insurance?
Car insurance protects you and your passengers if you have an accident, or other road users involved in a crash where you are at fault. Comprehensive Insurance would normally pay to repair or replace your car, or the other vehicle or vehicles, but there are lots of costs involved that may not be covered.
Legal expenses insurance (sometimes referred to as legal assistance) is one of the areas often not included in your main policy. This form of protection is an additional insurance you can take out on top of your main policy, usually for an extra cost.
What’s included in legal expenses insurance?
Repairing your car, or reimbursing the value of your vehicle, is often covered by fully comprehensive car insurance, but several other connected factors may not be included in your main policy.
Adrian Flux includes legal expenses on all its motor policies, and covers the costs involved in taking civil legal action in the event of a non-fault claim. This means the cover will only apply if you are involved in an accident that is not your fault. Also, it is often only valid whilst the associated motor insurance related to the legal expenses policy is in place.
These are some of the situations in which legal assistance cover may protect you.
- Motor insurance policy excess.
- Repairs to your vehicle.
- Hire of a replacement vehicle of a similar category to the damaged vehicle if it is not roadworthy or whilst it is being repaired.
- Costs of alternative transport like taxis or trains if a replacement vehicle is not required or cannot be provided.
- Legal cost of pursuing compensation for personal injury.
- Loss of earnings resulting from the incident.
- Cover for items damaged in the incident that were not part of the vehicle.
- Recovering the costs from towing, vehicle recovery or storage.
As an example, let’s say Mrs S is a mobile hairdresser and was hit in the rear when she was driving her young son to the child minders. Using her Motor Legal Expenses policy, she could recover a number of expenses, including: –
- Motor Insurance Excess (£350)
- Damage to personal belongings (£1,500)
- Lost earnings from missed appointments on the day of the incident (£100)
This means her total Uninsured Losses Recovered were £1,950.
The insurance provider made sure Mrs S had a replacement hire car which was a family estate car similar to her own. Fortunately, she was able to continue hairdressing while her vehicle was repaired.
As Mrs S also injured her wrist in the incident, she was able to claim compensation from the third party and a series of follow-up physio appointments to help her recovery. Her legal expenses insurance covered the solicitor costs, and she was able to keep all of the compensation.
With any insurance policy, it is always worthwhile reading the fine print to understand what will, and will not be, covered in the event of an accident or claim.
What doesn’t it cover?
For a legal expenses claim to be taken forwards, there needs to be ‘reasonable prospects’ of success. This means the legal expenses provider will assess the information about the incident such as the circumstances, witnesses, CCTV or dashcam footage in order to decide if the claim is at least 51% likely to be successful if the case went to court.
Here are a few situations where legal expenses insurance may not cover you.
- If the event occurred before your policy started or it happened within your cover period – but you didn’t tell your insurer until much later.
- If your insurance company advises against legal proceedings but you choose not to follow this advice.
- Incidents where the opponent cannot be traced as there is no third party to pursue.
It should go without saying that your legal expenses insurance provider is unlikely to pay out in the event that you have broken the law, lied or been violent.
There may be a maximum amount covered by your legal expenses insurance. This may be up to £50,000 or, in the case of Adrian Flux, £100,000.
Is it expensive?
Consumer watchdog Which? reviewed legal expenses insurance offered by a selection of insurance providers’, all of which cost between £24 and £31 per year. In comparison to thousands of pounds in legal fees, paying around £30 should seem reasonable and a small addition on top of your insurance premium.
Some insurance providers and brokers, including Adrian Flux, include free legal expenses insurance with their policies. Check what’s included in your policy – you may already have it as standard or paid for the cover as an add-on without realising. In the UK, it is believed around 5.5 million people already have legal expenses insurance but don’t realise.
Are there any alternatives to legal expenses insurance?
No-win-no-fee companies may be happy to take on your case after an incident if you do not have legal support. Depending on the small print and their own way of working, you will usually not have to pay anything up-front. The company will then take a cut of your ‘win’ should there be a subsequent pay out. These are popular in personal injury cases.
If you are a member of a trade union, you should be supported with situations arising at work that may require legal backing.
What happens if I need to use my legal expenses insurance?
If you want to claim legal expenses, you should call your insurance company’s claim line to discuss your options. The insurance provider will manage the claim on the policyholder’s behalf to pursue legal action and work with the third party and their insurer in order to recover the policyholder’s losses.
Where legal representation is required, in the case of a personal injury claim for example, the provider usually recommends a suitable solicitor. The representative providing legal assistance would have been properly checked and audited to ensure they meet the insurance provider’s standards and offer a consistently high service. He or she would then advise on whether you have a case.
Another helpful aspect of legal expenses insurance is the facility to recover the cost of damages to personal belongings in the vehicle. This may, for example, include replacing a child’s car seat, a standard safety recommendation if it has been involved in an accident, or the cost of damage to a pushchair that was in the vehicle at the time.
Using legal expenses insurance rather than another policy
Some everyday items such as smartphones cost hundreds of pounds or more.
While these items could be covered under another insurance policy, home contents or a specific gadget insurance policy, recovering their value through these options would involve another insurance claim and could mean paying an excess on that policy.
This could impact a No Claims Bonus or result in a higher premium at renewal on another policy. So the legal expenses policy may be an option to recovering the cost of personal belongings without these additional concerns.
Should I take out legal expenses insurance?
The decision is up to you. Is the peace of mind that you’ll get from having the cover worth the few extra pounds? What does the small print of the policy say it will cover you for? Have your friends or family taken out legal protection and used it – what is their view?
Of course, if you’re concerned about paying extra for something you may not need, you could buy car insurance through a broker or provider that includes legal expenses free of charge, like Adrian Flux.
What happens if I’m involved in an incident and don’t have legal expenses insurance?
Without legal expenses cover, the cost of legal proceedings can be huge. The government’s guideline hourly rate for solicitors in Cambridge is £217 for an experienced representative, which could accumulate in thousands of pounds depending on the complexity of the case.
It is worthwhile noting that this article mainly outlines ‘Before the Event’ legal expenses insurance. So even if you didn’t have legal expenses before an incident, it is possible to take out an alternative policy after an accident known as ‘After the Event’ legal expenses insurance.
With ‘After the Event’ legal expenses insurance, a solicitor may take a percentage of any damages awarded to the claimant – and this can be as much as 25% of the amount. If ‘Before the Event’ legal expenses insurance was used, the claimant will receive 100%.
Is legal expenses cover only available for car insurance?
No, you can get it with most vehicle insurance policies, including motorcycles, vans and motorhomes. These work in a similar way.
It’s likely that when buying home insurance (contents and/or buildings) you will also have the option to add in legal protection cover. Having this means that if, for example, you had a future dispute with a neighbour, or an issue with your home that became a legal matter, you would be supported with advice from a solicitor. Check your policy for specific coverage details.
You may also be interested in our guide to proving your No Claims Discount.