- Most home insurance policies include access to legal expenses insurance;
- Legal expenses insurance can cover:
- employment law claims for unfair or constructive dismissal;
- a dispute over rights of way over a shared driveway;
- dispute with a landlord regarding a tenancy agreement to rent your home;
- disputes over defective workmanship by tradesmen;
- a medical claim for failure to diagnose an illness or injury correctly;
- contracts for the sale and supply of goods and services - including holidays.
If you have home buildings or contents insurance then there’s a good chance that you have cover to fund the costs of legal advice and/or for bringing or defending a court case. Legal expenses cover is typically added to home insurance policies either as a standard feature or an add-on. In a nutshell, the insurance covers the cost of legal advice if you are sued or get into a legal dispute.
A comparison* of household insurance related legal expenses insurance by Gocompare.com Home Insurance found that most policies provide cover for a wide range of personal, non-home related problems. These can include contract disputes, personal injury claims, employment disputes and clinical negligence 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 typically providing a 24-hour legal helpline and, if a claim is accepted, policyholders are covered for the costs of instructing solicitors, barristers and/or expert witnesses. Some legal expenses insurers also provide free legal documents and templates – such as wills, power of attorney, tenancy agreements and complaint letters.
However, legal expenses insurance does not cover the payment of damages or compensation arising from a claim. Pre-existing disputes, family law disputes, matrimonial disputes including divorce and driving-related issues are common policy exclusions.
- a quarter of buildings and 25% of contents insurance policies automatically include legal expenses cover as a standard policy feature;
- Most buildings (65%) and home contents (67%) policies offer legal expenses cover as an optional extra. For these policies, premiums to add cover ranges from £2.99 to £45; typically cover costs between £15 to £30;
- Legal expenses claim limits range from £10,000 to £150,000;
- Where legal expenses cover is available, policies cover between 3 to 8 of the ‘perils’ listed below:
Legal Expenses Insurance Peril
Ben Wilson, from Gocompare.com Home Insurance, said: “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.
“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.”
For more information see Gocompare.com's guide on home insurance and legal expenses.
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Notes to editors:
*Source: Defaqto Matrix of 418 home contents policies and 409 buildings insurance policies - instant and unbiased market and competitor intelligence, from independent financial researcher Defaqto (17 March 2016). Percentages are rounded up to the nearest whole number.