NLIC.org

Franklin Said:

Is it worth adding legal cover to your car insurance?

We Answered:

Here is a trade secret. The actual cost of legal expenses insurance to the broker is.... wait for it ....... about £1.00 (One Pound) - because they usually have several thousand policyholders in the scheme.

The reason for the high mark-up is that many motor insurance policies provide little in the way of earnings for the broker - typically 7.5% to 15% (compare that to the 'mark-up' by retailers) from which the broker has to pay staff, bills, comply with the rules and regulations of the FSA, market their products etc etc etc -it is no wonder that they look at legal expenses as a source of extra income - and before you complain just remember that if the source of income did not exist then the broker would have to increase the prices of the basic product. If you do usea broker then you will get expert advice on the selection of your insurance policy and help if you have any insurance enquiries - you are paying (a bit) for access to professional services - well worth it when you need it.

So is legal cover worthwhile? If you do have a claim then you have immediate access to a company to work for you - you don't need to take time to shop around nor do you risk ending up with a 'rogue' company - mind you all providers have to be licenced these days. This help will probably start off with a better hire-car for instance. Some of these companies also operate 'claims management' services so that help is provided even if the claim is your fault or it is a fire/ theft claim. Also you do not need to worry about any costs or payments you must make should a claim be settled in your favour 'no-win, no-fee' implies that, should you win there will be a fee.

Constance Said:

in car insurance what do legal expenses cover?

We Answered:

If you have an accident and don't know ow to fight for yer rights.... if you pay that £26.90 they will fight for yer rights.

Dianne Said:

Do I need Legal Cover when taking out Motor Insurance?

We Answered:

When you have an accident you suffer two types of losses (for this purpose) - insured losses and uninsured losses. Insured Losses are basically the damage to the car, if you have comprehensive cover - and your insurance company pays these. Uninsured losses are: excesses, injury, time off work etc. Your insurance company is not interested in these.

So you have these losses - what do you do about it? You claim from the driver who is at fault. This could incur substantial expenses, you may have to fight the case to prove liability etc.

Legal Cover provides cover against these losses. The company who does the recovery will in most cases not have to go to court but if they do then the costs are insured (By now all lgeal expenses/ uninsured loss recovery policies contracts should be underwritten - but it never hurts to check).

Legal cover is not compulsory, however it can save you time and trouble if you do have to make a claim.

There are two types - before the event and after the event - if you buy before the event it will cost you about £20.00 - if you buy after the event it will probaby cost you up to 10 times as much. If you go to a third-party claims company then if you do make a recovery they may (not will) charge a percentage of the recovery - and of course you are in the lap of the gods as to whether the company you select is reputable - several high-profile companies went into administration.

April Said:

question regarding travel insurance legal cover?

We Answered:

I've never seen a travel insurance policy that covers legal costs (usually medical costs, trip cancellation, lost baggage, trip delay, etc), however that doesn't mean such a product is not out there. If you wish to cover those expenses make sure you explicitly inform the person you're purchasing the policy from that you want to ensure those kind of costs are covered.

Stanley Said:

Generally, will legal insurance cover this?

We Answered:

You'll have to be more specific about what you mean by "legal insurance." Are you talking about prepaid legal services? If so, read the contract you signed and see what it covers. If you're talking about auto insurance, that would definitely NOT be retroactive. If you are being sued over a Feb 09 accident, you need to involve the auto insurer you had THEN.