Calling Customers of DAS UK Legal Expenses Insurance

sbk1

Hello


Has anyone had a negative or positive experience with DAS?

They have put me and other customers through hell. The company aims to pay out nothing. They use every dirty trick to make you give up or pay yourself.

These policies are sold as an add on to home insurance. DAS takes in £100 million pounds per year from our premiums. But its profit is £110 million. How can that be??

DAS only pay out on 4% of claims they don't pay out 96% of the time. But they do claim tax perks of £10 million.

So whilst DAS puts customers through hell for the sake of a few thousand pounds, while they rake in millions.


DAS do not honour their own terms and conditions, as a matter of course. Customers find it really hard to hold them to account.

This is potentially a miss selling scandal to eclipse all others. We are gathering evidence in order to change the law. The public is being blatantly conned and action needs to be taken urgently.

Please message me if you have had good or bad experiences.

Thank you

OnanTheBarbarian

Can't comment as a DAS customer. but as someone who has worked in the legal services industry for over 20 years, dealing with motor claims for clients who had "legal cover" with their car insurance, here is how the motor legal protection/ Legal Expenses Insurance marketplace currently works in the UK.

1- You have the underwriter of the policy, often a foreign domiciled insurer in Gibraltar, Demnark etc.
2- You have the cover holder and/or the retailer of the policy, a broker, insurer or price comparison site/ MGA
3- You have the customer/ policyholder
4- You have the panel solicitor or in-house legal dept at the cover holder

Underwriter offers the policy up to the brokers etc to sell. The cost of each polcy to the broker etc is usually about 50p to £1.00 per policy. Broker/ retailer sells you this "£100K of legal cover" policy to you for £30.00 - ker chinggggg!

You've bought a legal expenses policy for your motor car.

You have an accident that isn't your fault and you've got a poorly neck and want to claim for this, so you report the claim to your insurer or broker, they realise you have legal cover and pass you over to their friendly law firm to deal with your claim.

On realising the claim may have some "prospects of success" the lawyer takes the case on. They pay the insurer or broker who put you onto them several hundred pounds as a "marketing fee". So remember, that nice insurer or broker who flogged you the 50p policy for £30 is now also making an extra £250+ for punting your details onto the lawyers.

The lawyers are happy to pay this as it saves them paying for TV and newspaper adverts and they are happy to be an approved "panel firm", Part of the terms of being on the panel however are that they must never go back with cap in hand to the underwriters of the policy asking for payment of any legal costs of the case does not succeed.


So altough you have a policy of insurance in place, the policy is just used as a claims capture mechanism for the insurer or broker who flogged you the policy to make nice fees from lawyers for the injury cases and also kick backs for credit hire vehicles.


The underwriter is happy to sit back in Gibraltar and count the milliions of 50p's and know they are seldom going to have to pay any fees out. The broker is most happy with the arrangements as they make a 6000% mark up turning 50p of expenditure into £30 sales and the lawyers make do out of the cases they win and get paid fees by the insurers of the party at fault.

The policies all have clauses saying your claim must have "reasonable prospects of success" This is used as a gateway for the underwriters to not agree to "fund" cases which have poor prospect, but it is also used by the lawyers to bat off any cases they don't like the look of, after all if the case looks like it will go sideways, they will be the ones incurring write offs of their fees and covering any opponent's fees (even though this is what the underwriters should be doing)

The FCA did a thermatic review of the sale of add-ons in I believe 2015 and recommended that such insurers should reveal claim payout rates and ratios. Suspecting this would blow the lid on the sham that is motor legal expenses insurance the ABI (voice of the UK insurance industry) did a good jpb of shouting down such recommendations and the FCA issued a very diluted recommendation that some add-on products like mobile phone insurance should reveal such info, but not legal expenses policies.

I have been involved in tender processes for law firms offering such services to major UK insurers where part of the criteria was that the lawyers would also pay for the unit costs of the legal expenses policy/underwriting. So the retailers of the policy would actually be paying nothing for it as the lawyers who wanted the personal injury work would be paying the 50p per policy and the insurers selling it out the door for £30 a time.

It is an utter sham and as a resut of knowing how all this works from behind the scenes, I devised a free alternative where people get the same accident services without having to buy a ";policy" and without seeing any deductions taken from compensation. I won't plug the company name as that's not allowed on here.

There are over 30 million cars alone registered in the UK, typical premium for LEI cover is £30. Even if only 50% of those vehicles had legal cover purchased alongside their motor insurance each year that's 15million x £30.00 = £450million premium income for a typical cost of £7.5million.

Happy days

sbk1

Thank you Onan, that's really helpful. It reminds me of how critical illness insurance used to work. Underwriters provided it free to brokers, who then charged £20 for it (old days). It was free because they never intended to pay out.

Whilst DAS don't reveal payout rates, they do boast about their COR which is 96%, which means they pay out only 4% of claims.

LEI is sold as £50k cover for legal expenses. So a person thinks it covers solicitors and court costs up to that amount. In reality you stand cap in hand for them to decide if your claim is worth their while. The solicitors cherry pick the cases they want and string along those they don't. It's odd that solicitors have a CFA with the customer, when according to the LEI terms, its the insurer who effectively owns the case.

First they make money through false pretext. They then move money around spurious umbrella companies such as medical expert firms etc. So their profit is more than their income. Exploiting all the tax loop holes.

The public simply don't know about this scam. When you come to use them, during some stress period, they fob you off, or the string you along. Even with a good case, if its not worth their while, they'll screw you over.
It explains why when you call them, they quickly deny claims, that's all they are set up to do. No legal knowledge required.

Yet the FOS and the FCA and Pru know all about it. So why haven't they done anything? They've had enough complaints.

If you would like to get in touch please send me your contact details. Thanks

PrivateClients

COR of 96% does not mean what you suggest at all. This in no way indicates they only pay out 4% of claims.

antrobus

sbk1 wrote: »

....
These policies are sold as an add on to home insurance. DAS takes in £100 million pounds per year from our premiums. But its profit is £110 million. How can that be??

Where did you get those numbers?

The 2018 accounts of DAS Legal Expenses Insurance Company Ltd show gross premiums of £118m, gross claims paid of £87m, and a loss of £10m.

sbk1

Where did you get your figures. I'd rounded them off.

sbk1

PrivateClients wrote: »

COR of 96% does not mean what you suggest at all. This in no way indicates they only pay out 4% of claims.

What does COR mean then?

Are you a broker?

antrobus

sbk1 wrote: »

Where did you get your figures. I'd rounded them off.

Their 2018 accounts filed at CH
https://beta.companieshouse.gov.uk/company/00103274

P.S. No amount of 'rounding off' can transform a loss of £10m into a profit of £110m.

antrobus

sbk1 wrote: »

What does COR mean then?

.....

Combined Operating Ratio - a measure of general insurance underwriting profitability, the COR compares claims, costs and expenses to premiums. If the costs are higher than the premiums (ie the ratio is more than 100%) then the underwriting is unprofitable. The company may still be profitable if investment income covers the shortfall. If the costs are lower than the premiums then the underwriting is profitable without having to rely on investment income. It is called the Combined Ratio because it combines the loss ratio (claims as a % of premiums) and expense ratio (expenses as a % of premiums).

https://www.financetalking.com/_popup-financial-glossary.php?id=239

I am not a broker, but I can Google.

Incidentally, DAS has a loss ratio of 69%.

PrivateClients

Yes but regardless of profit, COR doesn't mean what you have misrepresented it to mean.

For comparison, Direct Line has a COR of around 92%. Do you think they only pay 8% of their claims? Most firms want to be in the 90% to 95% space to be competitive and profitable. If you go over 100% for a few years in a row you tend to go bust.

Please do some.basic research on these fundamental insurance metrics if you would like to use them to make a point.

I accept you may be unhappy with the service you have received but you can't just quote irrelevant figures to try and support your argument. That's #FakeNews

Why not give details of your actual experience as an individual? Then other individuals might be helped by your post.

There is so much true information out there that you don't need to make things up. A cursory glance at the DAS financial report says their loss ratio is around 70%. This means that 70% of all premiums they receive are spent on claims.

Just so you know what I'm talking about, in simpleton terms, Combined Operating Ratio adds an insurers costs in running the business to to what they play in claims. It is not a claims.accceptance rate.

For full disclosure, I deal with DAS (amongst many others) as a broker. In the last 2 years I have seen them pay for a boundary dispute claim under legal expenses and the legal costs for that case were just shy of £70k, and also seen a lease dispute paid with legal fees of just under £60k. Anecdotal evidence in their support yes, but - like you - I have no knowledge or evidence of systemic failures from the company.

Also not all products are the same. I generally agree there is very little value in motor legal expenses, but I also sell commercial legal expenses and some high net worth legal expenses and the cover is broad, effective, and genuinely costs money.

For a broader overview of the legal expenses industry, the Civil Justice Council published a very informative 150 page review of the BTE insurance industry in 2017 that is full of facts and figures as to how the cover works, total value of the industry in GWP, market penetration and more. If you have an interest in the industry then it's a "must read."

antrobus

sbk1 wrote: »

...
Are you a broker?

PrivateClients claims to be a Lloyd's broker - there are only about 300 of 'em. They tend to know a lot about insurance.

P.S. See what I mean.