Car Insurance - Legal Cover, is it really needed?

ic

Currently looking to take out insurance with Aviva. They have the usual legal cover option, costing £27 for the year. Looking around I have some options:

- Aviva offer "Legal Services Cover" at £27.
- Best Advice offer "legal care" for £12 for the year.
- Arnold Clark Accist offer "accident management" for free.

So what are people's thoughts? The big difference I can see is that if an accident is my fault, the third party services don't look to protect me (Aviva says it provides £50,000 worth of legal cover, and £10,000 to defend me against motoring convictions). From what I've seen of friends who've had accidents that were 50/50 and don't have legal cover the insurers have just automatically paid out and been reluctant to argue in their favour. Would legal cover step in at this point and push harder in my favour if necessary?

I realise that other insurers offer free inclusive legal cover, however for me Aviva is £100 cheaper than the next closest.

InsideInsurance

My main thought is that this is asked at least twice a week and a quick search will give you hundreds of answers.

LE cover comes in with split liability cases and low value/ no injury claims. For non-fault accidents or accidents involving injury you will normally find there are plenty of other options out there.

ic

Thanks, I've just found your post from a month ago on a similar thread (I did Google, its usually very good at finding relevant threads from MSE, but not on this occassion...)

InsideInsurance wrote:

Legal Expenses cover is useful for those cases where no win, no fee solicitors wont take the case on. Mainly:

1) Small track cases (less than £5,000 of property cases or less than £1,000 of injury) where a no win no fee solicitor wont be paid

2) Obviously split liability cases where again a no win, no fee wont take it on because of only getting a proportion of fees etc paid. Its different where it seems to be the TPs fault but due to conflicting versions of events etc it subsequently becomes a split liability case

For Fast track and above cases with clear liability it is arguably unnecessary as either you can choose your own no win no fee solicitor or your insurer may offer to choose one for you even though you dont have LE cover.

The only advantage for the higher cases is that by having an insurance policy you have the protection of the Financial Ombudsman Service in addition to the Legal Ombudsman (the later of which many are complaining has no teeth)

So basically its as I thought, legal cover comes into its own where an accident could be judged to be your own fault rather than the other party? If it isn't clear cut, the legal cover will step in to fight your corner?

InsideInsurance

The legal expenses only covers you when it is deemed that there is reasonable prospects of success. It is ultimately the insurer that makes the judgement on this and so in theory there should be no difference in "fighting harder".

The reality tends to be a little different because many insurers overly devolve responsibility to the Sols and in many commercial arrangements the Sols only get paid by the TP/TPI and so if they spend time setting up the file, getting statements etc and then hit a road block they either write off all the effort they've put in or fight.

What is more the case is if the circumstances means the claim will be settled 80/20 against you the legal expenses insurance will still cover the solicitors recovering the 20% of your losses from the TP/TPI where as if you approached an accident management company or solicitor firm with the foreknowledge on only getting a 20% recovery they are almost certainly not going to be willing to take it on.

lisyloo

Legal cover is useful is some cases where another firm will not be interested.
For example claiming back an excess.
There are plenty of no-win no-fee firms eager for business if you are injured but for small claims they won't take it on as they can't claim fat fees.

You can of course claim back an excess yourself - provided you aren't physically incapacitated, traumatised or too skint to consider a moneyclaim etc.
However if you can't make a claim yourself for whatever reason then the legal insurance would help you. Of course they are not going to flog a dead horse, but if it's a straight non-fault claim then they will do the legwork which might be useful if you can't or are not inclined to.

I certainly know of people in my family e.g. elderly drivers, who are not legal savvy, who would need help with this and couldn't write the letters themselves, but that is of course a matter of choice.

ic

But in the case of non-fault, is an excess even charged? A friend of mine was recently crashed into the rear of. Direct Line automatically provided him a courtesy car and didn't charge an excess - even though he didn't have courtesy car cover or legal cover.

When my parked car was hit whilst parked in the car park at work, my colleagues' insurance contacted me direct and provided me with a courtesy car and repaired mine - again no excess to pay. I just notified my insurance about the accident.

From what InsideInsurance is saying, legal cover doesn't provide a fund to just take on claims for the sake of it. So I still don't see what legal cover provides that is over and above what standard insurance and accident management firms provide?

InsideInsurance

In the first instance look at the last part of my previous post on split liability cases.

In the second instance, not all non-fault accidents go smoothly. Yes if the TP immediately contacts their insurers and admits blame then you may be able to claim direct from the TPI and things are then easy.

If for whatever reason you have to claim off of your own insurance then you do have to pay your excess. Your insurer may choose to waive it as a guesture of goodwill but you shouldnt rely on insurance companies goodwill.

Classic causes are TPs not reporting accidents, TPs being insured with a foreign insurer, TPs not insured, TPs initially denying liability. TPIs have horrible long processes requiring claim forms etc, TPIs having indemnity queries

lisyloo

But in the case of non-fault, is an excess even charged?

If you claim off your own fully comp insurance then usually the insurer will charge the excess. Often you have to pay the garage.

Direct Line automatically provided him a courtesy car and didn't charge an excess

Were Direct Line his insurer? If so that's good service.

my colleagues' insurance contacted me direct and provided me with a courtesy car and repaired mine - again no excess to pay

That's a different scenario.
You are now claiming direct off the third parties insurance where you are correct no excess is due.
TP insurers are getting better at "getting in quick" as they don't want the costs e.g. car hire, racked up.
If you went through your own insurer you'd usually have to pay an excess.

So I still don't see what legal cover provides that is over and above what standard insurance and accident management firms provide?

Would an accident management firm claim back your excess for you?
If so how do they get paid for that? I am pretty sure they cannot claim back fees from the other side for that. I thought there were limits of what fees they can tack on which means they are interested in some cases (those with big fees) and not interested in those that don't generate fees.
If you are telling me that accident management companies will take on ALL cases then I'd be interested in knowing how they get paid for that.

At the moment my understanding is that you cannot get free help in ALL cases, only in the ones that generate an income for the companies you mention.

Whether it's worth it for the remaining cases is another question.
If your 90 and find it difficult to write letters then perhaps it is.
If your a savvy MSE that loves nothing more than taking people to court in your spare time then you can probably do it yourself.

ic

InsideInsurance wrote: »

Classic causes are TPs not reporting accidents, TPs being insured with a foreign insurer, TPs not insured, TPs initially denying liability. TPIs have horrible long processes requiring claim forms etc, TPIs having indemnity queries

lisyloo wrote: »

At the moment my understanding is that you cannot get free help in ALL cases, only in the ones that generate an income for the companies you mention.

Whether it's worth it for the remaining cases is another question.
If your 90 and find it difficult to write letters then perhaps it is.
If your a savvy MSE that loves nothing more than taking people to court in your spare time then you can probably do it yourself.

Thanks both - I think you've ironed out the cases in my mind where legal cover steps in.

Were Direct Line his insurer? If so that's good service.

Yes, and as far as I know they weren't also the third party's insurer (though I guess in that case they really wouldn't want to help then! - I suppose thats another case for legal cover!).

InsideInsurance

What hurts more from my perspective is when I pay them £25 for my LE cover they also receive money from the panel solicitors too. In other words they could truly give it away for free (not just hide a cost in the main premium) and still make a substantial profit from it, especially as penetration is typically around 90%.

If DL was his insurer and not the TPI and he didnt have a courtesy car on his insurance then the waiving the excess was discretionary (though DL always was one of the most generous for doing this) and the car he received will either have been something he arranged with the garage himself if he didnt use one of their network garages or more likely was a Credit Hire vehicle which is a very different beast to a courtesy car

ic

Yes - it was a hire car provided by Enterprise, rather than a courtesy car provided by the repair garage.