Legal Expenses Insurance – Do you know what you’re covered for?
Many consumers have legal expenses insurance
and don’t even know it – or certainly don’t know what they’re covered for.
The insurance is often sold as part of a bundle with home and car insurance or packaged bank accounts and typically costs between £13 and £24 per year. And yet it can be invaluable to people who cannot afford to seek justice otherwise – if only they knew what they had signed up for.
Now that the government is aiming to reduce the Legal Aid bill by some £350million a year, over half a million people will not be able to bring free civil legal aid cases.
However, if you have legal expenses insurance included within your home insurance policy, it could cover your costs in many areas, including Employment Law disputes
. If you believe you have suffered unfair dismissal or discrimination at work, your legal expenses insurance could help you bring your case
to Tribunal or Court. It could also cover personal injury compensation claims
or the costs of small consumer disputes.
Because so many are unaware of their legal expenses cover
, Consumer Focus has called for an overhaul of the system to give consumers a greater awareness of the product. The watchdog says that many people have been given access to justice as a result of having this cover.
"Worryingly for a product that millions of us have, there seems to be widespread confusion over what customers are actually paying for," said Lola Bello, legal services expert at Consumer Focus.
"If these insurance products are to play a more important role in providing affordable access to justice, they must be truly fit for purpose."
Consumer Focus wants clearer information for customers and the freedom for them to choose their own solicitors rather than having one chosen by the insurer.
If the matter proceeds to litigation (which can often be the case in employment law cases) the consumer is entitled to choose their own solicitor
although some insurers fail to either make this point clear and then proceed to appoint a preferred solicitor from their panel or sometimes impose penalties such as adding a higher excess to policies that give consumers freedom of choice in appointing solicitors. We advise you to double check with your insurer when taking out legal expenses cover so you are fully aware of your policy's terms and conditions.
Dan Watkins, of Contact Law, said: "For most clients we speak to, they want to have that face-to-face communication with their solicitor, particularly if there are complex legal issues to understand".
"In an ideal world, consumers would be able to appoint a local lawyer once the insurer has taken some initial information and confirmed that a case has the necessary legal merit to proceed - but this would inevitably lead to higher premium costs."Useful links