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Legal expenses cover and your home insurance

You might find that legal expenses cover comes as standard with your home insurance. If it doesn’t, it’s common to find it as an extra you can add-on to your policy.

Scales of justice are raised

So what is home insurance legal cover and what can it offer you?


What is home insurance legal expenses cover?

Taking a case to court can be eye-wateringly expensive.

Legal expenses insurance – also known as family legal protection – could help you pay the legal fees.

The types of thing it commonly covers include personal injury claims, employment disputes, disagreements about property and problems with the provision of goods and services.

Some policies will also cover more niche areas so it’s always worth checking what’s included.

You’ll generally find if you take out legal expenses cover with your home insurance that it’ll come from a different insurer to the main insurer.

This reduces the chance of the main insurer having to take action against itself and so have a conflict of interest.


What's covered by home insurance legal expenses?

What’s covered will depend on the insurer but you’ll tend to see the same core areas in most policies.

Common events that most policies include:

  • Employment disputes such as unfair dismissal claims
  • Property and neighbour disputes like disagreements about shared driveways
  • Personal injury claims such as a fall on a slippery supermarket floor
  • Consumer disputes including things like shoddy workmanship
  • Clinical negligence claims such as those for surgery that has gone wrong

Some legal expenses polices may also include things such as:

  • Identity theft cover for when someone opens accounts or buys products using your details
  • Jury service cover for lost earnings while you’re serving on a jury
  • Legal defence cover against claims arising from your work as an employee
  • Inheritance disputes about something left to you in a will
  • Appeals against non-admission to a school
  • Expenses related to an HMRC inquiry into your tax return


What is excluded?

An obvious exclusion is things that happened before the policy had been taken out.

And for some employment issues you’ll also need to have had the cover in place for a certain time before you can claim.

Some policies also make clear that you won’t be covered for things that you should have realised might happen.

As usual with insurance cover, you’ll have to check the small print but certain things are unlikely to be covered:

  • Family matters such as divorce and child custody cases
  • Things relating to planning law such as party wall disputes
  • Disputes about small amounts of money, for instance under £250

And for any disputes that are vehicle related you’re generally expected to rely on the legal expenses cover that’s usually offered with car insurance.


How much does legal cover cost? 

When taken out as an add-on to your home insurance legal cover costs around £30 for a year’s policy.

Some policies may include it at no extra cost.


How much cover would it give me?  

You’ll typically be covered for up to £100,000 in legal costs.

But some home insurance legal cover will only fund up to £25,000 of legal costs.

As always, check the small print to make sure you’re happy with what you’re paying for.


Is home insurance legal cover the same as liability cover?

No, they’re two different things.

As mentioned, legal cover with your home insurance could help you take legal action in cases concerning things like:

  • Personal injury
  • Contracts for goods and services
  • Property
  • Employment

Liability cover is there to help you if you’re held responsible for something that happened at your house.

Liability insurance covers things that happen to other people or their property like:

  • Accidental injury or illness
  • Accidental loss of or damage to property

Liability cover should come with your house insurance.

It can be difficult getting your head around the different home insurance types and how they relate to each other. 

So for ease of understanding:

  • Your buildings insurance will provide cover for things caused by the house itself. Such as bits falling off it and causing damage.
  • While your contents insurance will provide cover for things that happen on the premises.
  • So liability insurance could help you pay your neighbours for the dent in their car that was caused by a tile falling from your roof. Or pay damages to the visitor who hurt themselves when they tripped over the rug in your living room.

But if you suffer neighbour damage and your neighbours don't have liability cover, you may have to claim on your own home insurance. 

Liability cover generally comes as standard with home insurance and cover can be into the millions.

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Do I need legal cover on home insurance?

Legal cover doesn’t add that much to the overall cost of home insurance and could provide up to £100,000 in legal costs.

But while it’s reassuring to know it’s there if you need it, it’s worth thinking about the pros and cons before taking it out.

One of the major drawbacks to home insurance legal cover is that your case will only be taken forward if there is a reasonable chance you’ll win.

The Financial Ombudsman defines this as meaning that your chance of victory is 51% or higher.

You may have no say in picking the lawyer for your case or be limited to ones charging below a certain hourly rate.

And if you’re ordered to pay compensation to someone, this will not be covered by home insurance legal cover, only the legal costs.

If you decide you’d like legal cover with your home insurance, it’s worth checking first that you don’t already have it or have access to it.

You don’t want to end up with two versions of the same thing.

Some bank accounts will offer it as part of their package of benefits and membership of a union may also give you access to it.


What is after the event insurance?

As the name suggests, after the event insurance is taken out after something has happened.

After the event insurance is usually tied in with no-win, no-fee cases to help litigants with costs.

Legal expenses insurance, like insurance generally, is known as before the event insurance as it’s taken out in case something happens, not because it already has.