We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies as per our policy which also explains how to change your preferences.

Legal expenses insurance: is it worth buying?

Legal expenses insurance is often offered as an add-on to car and home insurance policies. Use our tables to discover how cost and cover varies.

In this article
What is legal expenses insurance? How do I buy legal expenses insurance? Is legal expenses insurance the same as liability cover?
How much does legal expenses insurance cost?  Is legal expenses insurance worth it? What are the alternatives to legal expenses insurance?

What is legal expenses insurance?

From claiming against a negligent driver to helping resolve an employment dispute, legal expenses insurance - often referred to as 'LEI' - offers a lot for a relatively small price.

The cost of taking legal action can be prohibitive. If you'd struggle financially to claim compensation following an accident, unfair dismissal from work or a dispute with a tradesman, legal expenses insurance can help you cover the costs of hiring a solicitor to take such a claim to court.

Legal expenses insurance is usually sold as an add-on to car or house insurance, generally for a small extra premium (around £25 is common). Occasionally it's included free.

There is always a limit to how much you can claim under the policy – usually £50,000 or £100,000.

How do I buy legal expenses insurance?

Legal expenses insurance is almost entirely sold as an add-on with car insurance and home insurance policies - but there are differences between how the two types of policy work.

Car insurance legal cover

Car insurance legal expenses insurance covers events arising from the use or ownership of an insured vehicle.

This may include taking action against a third party for negligence, or defending accusations made against you by a third party.

You'll usually be covered for up to £100,000.

Home insurance legal cover

Home insurance legal expenses insurance typically covers legal proceedings relating to your home, employment, death or personal injury.

It can also cover cases where you've entered into a contract for the sale and supply of goods and services.

These cover you for between £50,000 and £100,000.

Is legal expenses insurance the same as liability cover?

No. If you're liable for damages relating to your car or home, a standard car or home insurance policy pays out for this.

You usually get £20m in a car insurance policy and around £2m with a home insurance policy, without the need for additional legal expenses insurance cover.

Legal expenses insurance is most valuable for situations where you're pursuing legal actions to reclaim losses that weren't recoverable through your main insurance - such as the excesses you have to pay on an insurance claim. 

How much does legal expenses insurance cost? 

The table below shows the costs and levels of cover for legal expenses insurance bought as an add-on with home and car insurance policies.

The overall level of cover available through the policy is shown and restrictions may apply.

Where we've stated a 'reasonable amount of time' to make a claim, this means insurers don't specify an exact cut off date for claims. Check with your individual insurer for guidance on this.

The table is correct at May 2018. Based on a Ford Focus Zetec owner and a one-bed flat in south London. Use the drop down menu to switch between car and home insurance policies. 

Insurer

 

Premium
How long
do I have to
make a claim?
Level of cover
Aviva £29 Reasonable
amount of time
£100,000
AXA £29.99 Reasonable
amount of time
£100,000
Churchill £28 Reasonable
amount of time
£100,000
The Co-operative
Insurance
£25.50 180 days £100,000
Direct Line £28 180 days £100,000
Esure £31 180 days £100,000
John Lewis £24.49 180 days £100,000
LV £24.90 180 days £100,000
More Than £28.50 180 days £100,000
NFU Mutual Included as standard 180 days £100,000
RIAS £29.60 180 days £100,000
Saga £30 Reasonable
amount of time
£100,000
Sheila's Wheels £31 Reasonable
amount of time
£100,000
Swiftcover £29.99 Reasonable
amount of time
£100,000

 

Is legal expenses insurance worth it?

As our table below shows, legal expenses insurance often costs under £30 a year - so is pretty cheap when considering the tens of thousands of pounds it could potentially pay out for legal advice and representation.

But it's sometimes misrepresented when sold, so keep in mind it's limitations, such as:

There's no guarantee legal insurance will cover your claim

Legal expenses insurance doesn't operate in the same way as a dispute would if you instructed your own lawyer. Simply contacting your insurer won't guarantee you get a lawyer to pursue your case.

For a claim to be taken up, your insurer must be satisfied that you have a reasonable or better-than-average chance of winning your case at any time, not just when the claim is first raised.

If new evidence comes to light, funding for your lawyer could be dropped.

You may not get to choose your own lawyer

Insurers usually work with a panel of lawyers and will appoint one to your case. You have the right to select your own solicitor once proceedings have begun.

However, some home insurers have clauses that limit the hourly rate they pay their panel solicitors (which is likely to be way below the industry’s agreed rate).

Many independent legal firms won't be able to take on the work required at this rate.

If you're unhappy with how your LEI case is being handled, you can complain to the Financial Ombudsman Service.

What are the alternatives to legal expenses insurance?

After the event insurance

More expensive than legal expenses insurance, it's run by solicitors and covers a specific claim.

It often operates on a conditional fee arrangement, typically no win, no fee.

Legal aid

This provides advice and legal representation for some civil cases.

It doesn’t cover personal injury, and getting it will depend, in part, on your financial circumstances.

Savings

The cost of defending or pursuing a court claim can run into tens of thousands of pounds. If you have money put aside in a savings account for a rainy day, this could be an option.

If you don't, but want to start saving, the Which? Money Compare tables let you search hundreds of savings accounts and cash Isa deals from providers large and small, so you can find a good home for your savings.

Trade unions

Members of a union may have access to legal assistance for all manner of claims, including employment issues and personal injury.

×