Millions of people in the United Kingdom have insurance that might cover the legal costs of a variety of ordinary concerns. However, few individuals are aware of this. When our legal specialists take on your case, one of the first questions they will ask you is, “Do you have legal expenses insurance?” In the sections below, we explain what legal expenses insurance (LEI) is and how you may use it to cover your home’s legal costs and receive competent legal assistance.
What is Legal Expenses Insurance?
Nobody wants to get involved in a legal issue, but you never know when you’ll be on the wrong side of an unfair scenario and have to go to court. Legal expenses insurance will not make the process any easier, but it will make it significantly less expensive.
When you include legal expenses covered in your home insurance policy, you are protected against the cost of employing an attorney for a wide range of complaints. And, given that many lawyers charge upwards of £300 per hour, this can be a lifeline if there is a severe issue.
Each policy is unique, but you might receive up to £100,000 to cover your legal expenses. Some insurers include legal expenses coverage as a normal component of their home insurance, while others may offer it as an optional add-on for a few more pounds each month.
Do I require legal protection as the cover of my home insurance?
Legal cover is a valuable addition for property owners because there are several legal costs that may arise during the course of owning a home.
It adds £35 to the average combined house insurance cost per year, so the legal cover won’t break the bank. Many others, however, may not feel the urge to take it out at all.
What Role Do Legal Expenses Insurance Play?
If you find yourself in need of assistance, legal expenses insurance may provide you with access to a legal advice helpline as well as cover your legal costs if your case proceeds to court. Legal expenses insurance typically provides coverage for common issues such as:
- Unfair dismissal or workplace discrimination;
- Injuries sustained as a result of an accident that was not your fault; or
- Disputes over defective goods or services.
What Does Legal Expenses Home Insurance Cover Include?
Your legal coverage will help you a lot; most home insurance policies cover a wide range of legal issues. In some situations, you may also be able to obtain legal cover for matters that are unrelated to your property, such as job or tax issues. Some of the things you’re probably covered for are:
If you and your neighbour both claim the same piece of land or if a tree falls over and destroys someone’s property, you may have a boundary dispute.
- Noise complaints: If you need the courts to help you deal with a noisy neighbour, file a complaint.
- Buying or selling a house is a complicated business, and disagreements sometimes arise.
- Disputes over goods and services — for example, if you buy something and it arrives broken, or if a contractor fails to complete the project properly, you can obtain a refund.
- If someone sues you after being injured on your property, or if you have an accident and believe it was someone else’s responsibility, you can file an injury claim.
- Income loss if called to serve on a jury
- Employment difficulties: if you need to employ an attorney to contest an unfair dismissal or a case of workplace discrimination.
- Medical malpractice claims: If you have been the victim of malpractice, your insurer will assist you in obtaining compensation.
- Tax audits: if you are audited by HMRC, you may be able to claim the expense of defending yourself.
However, keep in mind that not all providers cover the same things, so check your policy paperwork carefully before purchasing house insurance legal cover; that way, you’ll know exactly what’s covered.
What Isn’t Covered by Legal Expenses Home Insurance Cover?
Your legal protection will cover a lot of things, but not everything. In a few significant circumstances, legal expenses insurance will not cover you, including:
- Any disagreement that arose prior to the purchase of insurance
- Any disagreement with the government or your local council
- Anything affecting your car – however, you can receive legal cover as part of your car insurance as well.
- Defamation cases
- Divorce and matrimonial disputes
- Finally, your insurance will not pay for legal bills if they believe you are unlikely to win the case – if they believe your odds are less than 51 percent, your claim will be refused. They also tend not to pay up if the issue is minor; for example, if you’re taking someone to court for £500 but the lawyers will charge £1,000, your insurer is unlikely to cover you.
How do I Obtain Legal Expenses Insurance?
Legal expenses insurance is almost exclusively sold as an add-on to vehicle insurance and home insurance plans, however, the two types of coverage operate differently.
#1. Legal cover for automobile insurance
Car insurance legal expenses insurance covers events that occur as a result of the usage or ownership of a covered vehicle. This may include initiating legal action against a third party for negligence or defending yourself against claims brought by a third party. You should be insured for up to £100,000 in most cases.
#2. Legal cover for your home insurance
House insurance and legal expenses insurance often cover legal proceedings connected to your home, work, death, or bodily harm.
It may also cover you if you’ve engaged in a contract for the sale and delivery of products and services.
These range from £50,000 to £100,000 in value.
What is the Cost of Legal Expenses Insurance?
The table below shows the costs and levels of coverage for legal expenses insurance purchased as an add-on to home and auto insurance policies. The policy displays the overall level of coverage it offers, and restrictions might be in place.
When we say a reasonable period of time to lodge a claim, it means that insurers don’t define a precise cut-off date for claims. For more information, contact your particular insurance company.
The table is up-to-date as of May 2018. Based on the owner of a Ford Focus Zetec and a one-bedroom flat in south London.
| Insurer | Premium | How long do I have to make a claim? | Level of cover |
| Aviva | £29 | A reasonable amount of time | £100,000 |
| AXA | £29.99 | Reasonable amount of time | £100,000 |
| Churchill | £28 | Reasonable amount of time | £100,000 |
| The cooperative insurance | £25.50 | 180 days | £100,000 |
| Direct Line | £28 | 180 days | £100,000 |
| Esure | £31 | 180 days | £100,000 |
| John Lewis | £24.49 | 180 days | £100,000 |
| LV | £24.90 | 180 days | £100,000 |
| More Than | £28.50 | 180 days | £100,000 |
| NFU Mutual | Included as standard | 180 days | £100,000 |
| RIAS | £29.60 | 180 days | £100,000 |
| Saga | £30 | A reasonable amount of time | £100,000 |
| Sheila’s Wheels | £31 | A reasonable amount of time | £100,000 |
| Swiftcover | £29.99 | Reasonable amount of time | £100,000 |
Is it Worthwhile to Purchase Legal Expenses Insurance?
As shown in the figure above, legal expenses insurance frequently costs less than £30 per year – a bargain when compared to the tens of thousands of pounds it may potentially payout for legal advice and representation. However, it is occasionally misrepresented when sold, thus, keep in mind its limits, such as:
- There is no certainty that your legal insurance will cover your claim.
Legal expenses insurance does not work in the same way that a disagreement would if you hired your own attorney. Simply contacting your insurer will not guarantee that a lawyer will take up your case. To accept a claim, your insurer must be convinced that you have a fair or better-than-average chance of winning your case at any time, not just when the claim is originally filed. If fresh evidence emerges, your lawyer’s payment may be withdrawn.
- You may not be able to select your own lawyer.
Insurers typically deal with a panel of attorneys and will assign one to your case. Once the proceedings have begun, you have the right to choose your own lawyer.
However, some home insurers include terms in their policies that limit the hourly rate they pay their panel solicitors, (which is likely to be significantly lower than the industry’s agreed rate).
Many independent law firms will be unable to take on the work at this rate.
What Alternatives Are There to Legal Expenses Insurance?
#1. After Event Insurance
It is more expensive than legal expenses insurance and covers a specific claim. Solicitors are in charge of running it. It frequently operates on a conditional fee basis, meaning no victory, no fee.
#2. Legal assistance
This service provides legal advice and representation in some civil cases.
It does not cover personal injury, and your ability to obtain it is contingent on your financial situation.
#3. Savings
Defending or pursuing a court action might cost tens of thousands of pounds. This could be a possibility if you have money set up in a savings account for a rainy day.
#4. Labour unions
Members of a union may be able to obtain legal representation for a variety of concerns, including job issues and personal injuries.
Is Legal Expenses insurance the same thing as Liability Insurance?
Both legal expenses insurance and liability coverage protects you against legal claims, but they cover them in quite different ways. When you purchase legal expenses insurance, you are protected against the cost of hiring a lawyer to handle your case. Meanwhile, liability coverage protects you in the event that someone sues you and you are required to pay compensation.
Because liability insurance must cover financial settlements that can easily exceed £1 million, it is more expensive. It is primarily intended for people who own enterprises that entail dealing with members of the general public. However, if you run a business out of your home and there’s any chance that someone will sue you, public liability insurance is a must. You can learn more about it in our guide.
Legal Expenses vs Liability Cover
Your regular house insurance coverage will cover you if you are held liable for damages to your home. So, legal expenses coverage is useful for initiating legal action to collect damages that your ordinary home insurance policy does not cover, such as the excess you pay when filing a claim.
Legal Expenses Insurance FAQs
What legal expenses mean?
Legal Expenses include any fees, costs, and expenses spent by any Person insured herein and its counsel in investigating, preparing for, defending against, or giving evidence, producing documents, or taking other action in connection with any threatened or asserted Claim.
What are legal expenses in business?
These expenses could include lawyer fees, witness expenses, court fees, or even the cost of hiring expert witnesses. LEI is primarily used in large organisations, but it is vital for any size business that faces the possibility of being sued or needs to offset the cost of suing a customer.
Are legal expenses a liabilities or assets?
According to accounting laws and regulations, all expenses are debited in the appropriate expense accounts. Other possibilities, such as land, Liabilities-Loan, and Revenue-Income, are incorrect because legal expenses are not an asset.
