What is legal expenses insurance

legal expenses insurance explained

Legal expenses insurance

Legal expenses insurance is described by the Financial Services Authority (FSA) on its Money Made Clear site. Here is what it says:

“This is a way of protecting yourself against some of the costs involved when funding a legal dispute, which can be very expensive. The cover often provides for legal advice helplines, as well as the costs of appointing solicitors, expert witnesses and representation if the claim goes to court.

It can be bought with some insurance policies. For example, some companies selling motor and household contents insurance may include this cover as a free add-on, while others give you the option to attach the cover for an additional premium.

If you’ve decided you want this type of cover, check your motor or household contents insurance policies – you may already have this cover written into your insurance.

You should also check your insurance policy documents carefully to make sure you understand what you are covered for, the level of cover and any limitations that apply. For example, in most circumstances you may not be able to choose which lawyer is instructed – the insurance company usually appoints a lawyer to act for you.

Also this type of cover normally allows the insurer to withhold or withdraw funding if there isn’t a ‘reasonable prospect of success’, which is usually interpreted to mean that you have a 51% or better chance of winning or defending your case.”

The case must always have reasonable prospects of success. At the time of writing there are alternatives to buying legal expenses insurance up front and you can see the debate in greater detail by clicking here.

Your Key will arrange a policy of legal expenses insurance if you need it and at no cost to you. We aim to allow you to avoid the inflated cost of this form of legal cover when bought with motor insurance policies.

Please note that comments below dated before 2012 which refer to legal cover arrangements are now out of date. Please click here for an explanation.