What is legal expenses cover for?

Legal expenses cover is bundled into most home and motor policies and is largely unused, partly because people do not know they have it and partly because the first thing they do invalidates it.

Safety

Step by step

1. Check whether you already have it.It is commonly included or offered as a low-cost add-on with home, motor, bank accounts and some credit cards. Many people are paying for it and do not know.
2. Know what it typically covers.Employment disputes, personal injury, consumer disputes over goods and services, property and neighbour disputes, tax investigations, and sometimes identity theft. Limits are usually £50,000 to £100,000.
3. Know what it does not.Divorce and family matters, disputes that began before the policy started, business matters on a personal policy, and defending most criminal charges. These are the standard exclusions.
4. Ring the helpline before anything else.This is the rule that matters most. Instructing your own solicitor before notifying the insurer voids the claim under almost every policy, and it is the commonest way cover is lost.
5. Expect them to choose the solicitor.Insurers use panel firms. You generally get a free choice only once formal proceedings are issued, and even then within limits. That is a real constraint, not a formality.
6. Understand the prospects-of-success test.Most policies only fund a case with better than a 51% chance of success. The insurer assesses it, and a refusal on those grounds is not the same as saying you have no case.
7. Report it promptly.Policies require notification as soon as you become aware of a potential dispute. Late notification is a common ground for declining.
8. Use the free legal helpline.Most policies include unlimited access to legal advice by phone regardless of whether you claim. It is genuinely useful and heavily under-used.
9. Check whether you are covered twice.Home policy, motor policy, bank account, union membership and some credit cards all offer it. Paying for the same cover three times is common.
10. Consider union or professional cover.Trade union membership usually includes employment legal support that is often more useful for work disputes than an insurance panel firm.
11. Read the excess and limits.Some policies carry an excess, and the limit is per claim rather than per year. For a substantial dispute the limit can be reached.
12. Challenge a refusal properly.You can ask for the reasons in writing, get your own opinion on prospects, and complain to the Financial Ombudsman Service if you disagree.

Tips

• Ring the helpline before you ring a solicitor. That single order of operations decides whether you are covered.
• Check the bank account and the credit card too — you may be paying for this three times.
• The free legal advice line is included whether or not you claim. Use it.

Common mistakes

• Instructing your own solicitor first — Almost every policy requires notification before any legal costs are incurred, and doing it the other way round voids the claim entirely.
• Assuming it covers family matters — Divorce, separation and most family disputes are standard exclusions on domestic legal expenses policies.

If it doesn't work