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Who would foot the bill if another driver crashed into you, injuring you and making it impossible for you to work?
Or if you had to pursue the other driver’s insurer through the courts to recoup money spent on taxis or hiring a vehicle while your car was being repaired?
Your car insurance might – but only if you’d taken out legal expenses cover as an add-on to your policy. But should you pay extra to add this to your annual car insurance policy? Let’s take a closer look at the reasons for and against…
What is legal expenses cover?
Legal expenses cover is a type of insurance you can buy alongside your car insurance to cover yourself against the potential costs of legal action either brought by you or against you as a road user. Circumstances that could result in legal costs include:
- Having to take action against another road user for negligence, or
- Needing to defend yourself against accusations made by another driver.
Legal expenses cover can also be taken out as an add-on to a home insurance policy, in which case it typically covers legal proceedings relating to your home, your employment, your death or personal injury and the supply of goods or services.
Insurer LV estimates that 40% of its customers choose to add this type of cover to their home insurance policies.
Whether it’s an add-on to car or motor cover, the maximum you can claim is usually limited to say £50,000 or £100,000.
How much does legal expenses cover cost?
The cost of adding legal expenses cover to your car insurance policy is generally around £20 to £25 a year.
Some deluxe policies offer it as standard for no extra charge.
When you’re shopping for car insurance, make sure your final quote does not include legal expenses (or any other add-on) unless you actually want it.
You might have to untick a box if you decide you don’t need the cover.
What are the advantages of taking out legal expenses cover?
The cost of legal proceedings can be huge. So taking out legal expenses cover would prove a very worthwhile move if you needed to take legal action for any reason, for example following a car accident.
Legal expenses cover can also be used to recover any excess you have to pay as a result of a crash in which you were not at fault.
Plus, it usually entitles you to access to a free legal helpline, which could be a valuable source of advice on legal matters.
What are the disadvantages of taking out legal expenses cover?
One of the main issues with legal expenses cover is that there are no guarantees your claim will be accepted.
You will, for example, only be allowed to make a claim if it is completely clear who was to blame for the accident and the insurer expects the legal action to go in your favour.
Claims may also be rejected if too much time has passed since the incident, or the insurer does not feel the amount being contested is high enough to warrant court action.
This would be the case if the amount involved was £500, but the insurer expected the case to cost say £1,000.
Do I need legal expenses cover?
Around 25 million households already have legal expenses insurance, according to figures from the Office for National Statistics – although there’s a question as to how many actually know they have the cover, having inadvertently gained insurance as an add-on or as a benefit of employment.
The main benefit is the peace of mind that comes with knowing they won’t have to cover the cost of pursuing legal action should that become necessary.
If you’re thinking cover might be worthwhile, remember to check whether you already get free legal advice through your trade union or being a named driver on someone else’s car insurance. There’s no point in doubling up.