Let’s hear it for legal expenses cover!

Celebrations
Esmerelda's joy at finding out her home insurance included legal cover was uncontainable
“Legal expenses policies generally give you access to a free 24-hour, legal helpline through which you can get advice about all types of disputes. When you take the high cost of legal fees into account, access to this helpline alone may be worth the cost of the policy” Ben Wilson
  • | by Kristian Dando

Home insurance is there for you when your roof’s blown off, or your house has been hit by a flood, or a rogue falling tree has suddenly appeared in your lounge.

But did you know that home insurance policies can include legal cover too, either as standard or as an optional extra?

This might cover things like disputing dodgy work by tradesmen, solving a neighbourly dispute over a driveway (we’ve all been there), or employment law claims for unfair or constructive dismissal.

The boffins at Gocompare.com carried out an extensive comparison of household insurance related legal expenses, and the results are truly earth-shattering – most policies provide cover for certain non-home related problems too, including bodily injury claims, employment disputes and  contract dispute cases.

To be eligible, the claim must be for uninsured losses of a certain value (for example £250) and must have a ‘reasonable prospect of success’.

Policyholders have access to advice on any personal legal matter covered under the policy with insurers usually laying on a 24-hour legal helpline and, if a claim is accepted, policyholders are covered for the costs of getting solicitors, barristers and/or expert witnesses on the case.

Some legal expenses insurers also throw in free legal documents and templates – such as wills, power of attorney, tenancy agreements and complaint letters. Which is nice.

But woah there! There's a bunch of stuff which might not be covered too.

Policies vary and you should check your terms and conditions, but look out for limits that are placed on claims.

If you're being taken to court you should expect a policy to cover legal fees and legal costs awarded against you, but don't expect it to cover any compensation you're ordered to pay.

If you want protection in this area, consider public liability insurance.

Two common exclusions from legal expenses insurance are matrimonial disputes - meaning that you're unlikely to be covered for the cost of a divorce - and libel cases.

In addition, policies will not offer cover for disputes that arose before the insurance was taken out.

Ben Wilson, home insurance expert at Gocompare.com opined: “Whether you’re a home-owner or renter, legal expenses insurance bought with or alongside your home insurance can prove invaluable.

“Legal expenses insurance is designed to pay for legal costs in pursuing a personal court case or claim such as a personal injury claim, a dispute with your employer, neighbour or landlord – which otherwise you may be unable to afford. 

Ben continued: “Bought alongside home insurance, cover is relatively cheap. But, premiums and what’s insured varies considerably between policies. So, it’s important to compare both the cost and content of the policies on offer. 

“Legal expenses policies generally give you access to a free 24 hour, legal helpline through which you can get advice about all types of disputes. When you take the high cost of legal fees into account, access to this helpline alone may be worth the cost of the policy.”