Is the insurance worth the risk?

When you next renew your house or contents insurance pay particular attention to the breakdown of charges. Very often the insurance company will offer you legal expenses insurance for an additional £10.00, £5.00, or even, for 'free'. If you have this you are able to use the insurance company's indemnity to either pursue, or defend, a claim. Most are used for injury compensation type claims.

If something looks too good to be true then it usually is and this is the case with these cheap, or free, legal expenses insurance policies. If you contact your insurance company, in order to use the indemnity to make a claim, most insurance companies will insist that you use a firm of solicitors which is on their panel. They are unlikely to be local to you and are more likely to be based many miles away. You may not ever even get to meet them.

You ought to be aware that the majority of law firms on insurance company panels pay a fee (very often a hefty fee, as much as £750) to the insurance company to have work referred to them. Your claim is, effectively, sold to the solicitors. Further, the work is not necessarily done by highly qualified, specialist, lawyers. These factors will have an impact on the quality of service you will receive from them.

If you have to issue a court action in your case then it is unlawful for the insurance company to insist that you use their own panel firm because they are, effectively, restricting your freedom of choice to appoint your own legal representative.

If you consult your local solicitor first, they will be able to advise you as to whether it is beneficial for you to use the legal expenses insurance. There are other methods of funding available prior to issuing a court action and, at that stage, the insurance company will not be able to avoid appointing us to act for you.

You should investigate taking advice from a local firm that is not tied to any of these insurance company panels. You may feel that this approach works better for you as they will be completely independent and you will also then have the advantage of having specialist lawyers who are able to deal with your claim, in a branch which is local to where you live or work.