Legal expenses insurance: how does it work?

Legal expenses insurance provides financial protection in the event of litigation or legal action. It allows policyholders to obtain legal services in the event of a dispute with a third party, or to obtain compensation for costs incurred.

This insurance can be sold as a complement to automobile or home insurance. It can be included in the insurance policy, or purchased separately. It is also known as legal protection insurance.

Services may concern legal proceedings (criminal, civil or administrative) or out-of-court settlements, initiated by you or your adversary. The services provided may vary from one insurer to another.

It generally covers the costs of defending your rights, such as :

• Lawyer’s fees
• Legal and expert fees
• Mediation or negotiation costs

Legal expenses insurance is necessary in a variety of situations. Let’s examine the different types of disputes to which it may apply:

• Property-related disputes (problems with neighbours, tenants or landlords)
• Labour disputes (unfair dismissal, harassment)
• Consumer disputes (hidden defects in purchases, non-conforming services)
• Defense against criminal charges (in certain cases)

Legal protection insurance can help you when:

• A claim you have made is disputed
• You dispute a claim made against you

In the event of a dispute with a third party, the insurer’s role is to provide you with the necessary services to defend your interests. This may be resolved amicably or through legal proceedings.

First and foremost, before any legal proceedings are undertaken, the insurance company will provide you with legal advice. This will help you understand the issues at stake and identify the best way to resolve them.

As part of an amicable procedure, the insurer will provide legal assistance (lawyers and other legal professionals) and technical assistance (experts) to help you win your case (ideally).

In the event of legal proceedings, the insurer is responsible for covering the cost of legal proceedings and additional expenses, provided that the limit set by the contract is not exceeded. These expenses may include:

• Legal fees
• Expert fees and expenses
• Costs of proceedings
• Commissioner’s fees

The insurer is obligated to inform you of the cost of legal protection insurance. If the contract has not been taken out independently, the premium must be clearly indicated in the specific section devoted to it.

Before taking out this insurance, you should take the time to fully understand it. Above all, find out about its limitations and exclusions. Here are a few examples

• This insurance will not cover any disputes you were aware of before taking out the policy.
• It will generally take effect 60 days after it is issued.
• Certain areas of law are excluded from most contracts. These include divorce, separation, child custody and alimony disputes.
• Criminal and penal disputes are generally not covered.
• This insurance may include a deductible.
• It may cover only part of the costs (co-insurance).
• The insurer can set a maximum hourly rate that it will reimburse for the services of the lawyer or notary of your choosing.

You can check that the firm offering you the insurance is authorized to do so by calling the Authority’s information center or by consulting the Register of companies and individuals authorized to practice.

It is also very important to avoid confusing legal insurance with legal assistance.

Here are some things you should check before taking out legal expenses insurance:

• It is legal insurance, not a legal assistance service.
• You know the exact amount of the insurance.
• You know the extent of the services covered.
• You are aware of the applicable limitations and exclusions.
• You know if there’s a deductible to pay, in the case of co-insurance.

Legal expenses insurance provides the tools necessary to assert your rights in the event of a dispute, while limiting your legal costs. However, it is essential to understand the coverage provided, as well as the exclusions and limitations set out in your policy.

Before signing, examine the conditions, costs, and scope of services covered to ensure that they meet your needs. Adequate preparation ensures that you are well protected in the event of a dispute and that you benefit from effective legal support.

For any questions or clarifications, please don’t hesitate to contact the Malouin Assurance team!