Should I bother with legal expenses insurance?

My motorcycle insurance is up for renewal this month, and I was wondering if it is worth paying the extra bit for legal costs insurance? I have always paid for it in the past it but have luckily never had to use it.   I could save money by not having it and so was wondering if it is actually worth it or if it is just another money-making add-on?

Rebecca, by e-mail

Answer

The technical term for what you are referring to is a ‘before the event’ (BTE) legal expenses insurance policy (LEI). These policies are to protect you if litigation is required to pursue a claim and while they can be useful, they often don’t cover what you would expect: Some policies do what they are supposed to, but others are so restrictive as to be effectively useless.  For example, many insurers try to refuse to provide cover if you want to choose your own specialist and independent solicitor, as opposed to the firm of solicitors the insurer has a commercial agreement with.

If you do decide to opt for legal expenses insurance, then it would be worth taking the time to read the terms of the policy carefully to find out exactly what is covered. You may also already have legal expenses insurance through, for example, a home contents policy. If you don’t want the BTE cover, you will still be able to take out similar insurance at a later stage should legal action be necessary provided the claim has reasonable prospects of success.