Legal expenses insurance can be purchased to insure against potential future legal costs. Policyholders can access legal advice and representation with legal costs and expenses being covered by the policy. Sometimes it is included as a standard feature of primary insurance policies (usually motor or home insurance). Alternatively, it can be purchased as an add-on to these existing insurance policies.
The LSB’s sector-wide strategy includes the aim of most households having legal expenses insurance or other mechanisms enabling them to access a wide range of legal services free at the point of need within the next decade.
We wish to see the use of legal expenses insurance to fund legal services grow, as one of a range of tools to widen access to justice. Yet, while recognising its potential, we also want to ensure that consumers can exercise choice, access good quality products and are well protected when using them.
Based on our work to date we have identified three ‘key asks’ from the legal expenses insurance sector to help achieve this goal:
- Raise public awareness and understanding of legal expenses insurance
- Incentivise insurers to improve the coverage and quality of products
- Build trust through greater transparency and improve satisfaction with products
In November 2021, we published a document (PDF) setting out these asks in more detail.
In April 2022, we published an independent analysis of complaints made to the Financial Ombudsman Service (PDF). This found that complaints are roughly equally split between issues about decisions to decline cover and the claims handling service provided by the insurer. The researchers identified five overarching themes running through the complaints they analysed: providing clear information to consumers; communicating effectively and managing expectations; avoiding delays; being thorough; and reviewing complaints carefully.
In November 2021, we published the findings of a mystery shopping exercise (PDF) to gather information on legal expenses insurance offered alongside home buildings and contents insurance on the UK’s four largest price comparison websites. Higher priced policies would normally be expected to offer consumers more than cheaper ones. Yet, based on Defaqto star ratings, our exercise found no correlation between the price of the legal expenses cover and the quality of these products.
In June 2021, we published qualitative research with LSB’s Public Panel on attitudes towards legal expenses insurance. Participants assumed legal expenses insurance is more expensive and restrictive than is the case. This misconception limits the role legal expenses insurance could play in meeting unexpected legal costs.