We are often asked about products called legal expenses insurance, legal cover, legal protection, or an uninsured loss recovery service. These services are often included in an insurance policy. To help there are a few basics to understand:
* You buy vehicle insurance to cover your liability to others – third party cover.
* You might add other risks to the policy, like your bike and clothing.
* If there is no one to blame for an accident your insurer will pay for items you have insured at their market value at the time of the accident.
* If someone is to blame then the accident is not really any business of your own insurer – you should claim everything direct from the person to blame.
Legal cover is designed to allow you to recover for loss and injury from the person to blame, usually their insurance company, without worrying about legal fees. The legal cover will pick up the tab if the legal case goes wrong, but only if it goes wrong. If the legal action is successful then the person to blame pays your legal bill. This legal cover can be put in place in advance of, or after an accident.
Now this is where you have to concentrate.
Legal costs will be paid by the person to blame if the injury you suffered is worth more than £1,000; and if there is no injury, where the market value of all items damaged is more than £10,000 (in England & wales but less elsewhere in UK). Most legal cover will only support a case where legal costs can be recovered, and the same goes for uninsured loss recovery services. You will find exceptions in legal cover policies which exclude cases where the legal cost of recovering a loss is greater than the loss. That means you will not get support if running a case for you is uneconomic or not commercial.
None of this is surprising, as all insurance is based on economics, but when you are sold legal cover or an uninsured loss recovery service, you will be promised the earth. Do look closely at the terms. We think it unlikely you will be buying any more cover than Your key can arrange for you without cost.
Your Key helps members bring small claims, and to see our recommendations please click here.
Please note that comments below dated before 2012 which refer to legal cover arrangements are now out of date.Please click herefor an explanation.