No 38

Being in the right can be costly


Legal expenses insurance provides support when you require legal advice and representation, and also finances the possiblity to assert your legal rights.

Be clear about the legal risks that you want covered!

You can choose various legal areas depending on your individual requirements. Employment law, traffic law, property and tenancy law or compensation and criminal law cover are frequently chosen.

Cover for some legal areas may only be concluded in combination with other areas. Ask your insurance adviser and compare several offers!

What costs are covered?

Your insurance contract and the general terms and conditions of insurance will determine which costs are covered. Lawyer’s fees, advances and fees for court proceedings and administrative authorities, as well as experts, interpreters and witnesses and the costs of the other party

in civil proceedings are usually covered if a payment obligation arises. In addition, any travel costs as well as bail amounts in the form of a loan up to the amount of the sum insurred, may also be covered provided that doing so is necessary for exercising your legal interests.

Do not ignore the following issues!

Choice of lawyer
As a rule you have the right to choose your own lawyer. However, it may be arranged in the contract that the lawyer is required to have the registered address of its legal practice in the same city or district as the competent court or the competent administrative authority.

Certain types of legal disputes (e.g. Inheritance disputes) are frequently excluded from cover. Some risks can not be insured against at all – such as gambling, divorce and war.

In the event of a claim being made there is often a personal contribution (excess) to be paid – the amount of which may vary greatly. Inform yourself!

Waiting periods
There may be waiting periods for cover in relation to certain legal areas, i.e. insurance cover will only begin once a certain period of time has elapsed.

Coverage level
The maximum amount that the insurance company will cover in a claim should be adequate for the potential risks.

General Terms and Conditions of Insurance
Master arrangements that are formulated by the insurance undertaking as the legal basis for the insurance contract. They describe the standardised rights and obligations of the contractual parties as well as the scope of the insurance cover.

Arbitration procedure
Thematic experts resolve differences of opinion arising between the contractual parties. These experts are named by neutral third parties, or in equal numbers be the insurer and the insurance policyholder.

Make use of your insurance

In the case of an insured event occurring, i.e. if the risk described in the contract and covered by the insurance company occurs, the following applies: Contact your insurance company without delay if you require legal assistance. The insurance undertaking is required to inform you about your obligations within two weeks. Once you have submitted the requested documents and information in full, the insurer is required to

confirm or reject your insurance coverage in writing within two weeks. A rejection must be justified. In the event that you and your insurer have a difference of views about how to proceed as well as the prospects of success of legal action, you may make use of an arbitration procedure.

A to Z of Finance

You can find basic information about insurance on our website in the A to Z of Finance section.