If you have to assert your rights in court or with the help of a lawyer, your legal protection insurance will cover the costs incurred. This way you can face legal disputes with your landlord, employer or authorities more calmly. Here we show you which costs are covered by legal protection insurance and whether the insurance is worthwhile for you.
What is legal protection insurance?
Your legal expenses insurance covers the costs of legal proceedings in and out of court. This means that it covers your legal fees if you are represented in court or out of court. It also pays for costs incurred around a court case and covers your costs if you lose in court.
Keep in mind: Your insurance does not cover all legal costs. Rather, costs are only covered in the legal areas covered by your tariff.
Why is legal protection insurance useful?
If there is a dispute in court, high costs will be incurred. If you lose in court, for example, in connection with an eviction action due to owner-occupancy, you will incur court and attorney fees of around 4,000 euros (depending on the amount in dispute). If you lose the case, you have to bear these costs yourself - every legal dispute therefore involves a certain cost risk for you. Legal protection insurance helps you to exercise your rights with peace of mind.
In the insured areas of law, the insurance covers not only the necessary legal fees, but also
- court costs
- the costs of your adversary, if you lose in court
- fees for experts and witnesses
- travel and translation costs
- penalty deposit (as an interest-free loan)
The costs incurred will be paid by the insurance company in full or up to an agreed maximum amount. If a maximum sum is agreed upon, it is often between 3,000 and 6,000 euros per year or per claim. In addition, most insurers offer you the option of receiving advice from legal experts by telephone. The hotlines are usually available around the clock.
If you take out legal protection insurance, you are not only assured of competent legal advice. You also have the opportunity to enforce your rights in court without having to fear the financial risks of a lawsuit.
What benefits does legal protection insurance provide?
Your legal protection insurance covers costs related to legal disputes in the legal areas covered by your insurance tariff. The most important areas for which you can take out insurance are: Professional legal protection, private legal protection and traffic legal protection.
- If you take out insurance for private legal protection, your insurer will cover the costs arising from disputes in the private sphere. Typical private disputes include online purchases, faulty repairs, disputes with insurance companies, in the neighborhood or with the landlord.
- If you take out occupational legal protection insurance, your insurer will cover the costs of disputes with your employer. Typical disputes in this context are, for example, actions for protection against dismissal or those directed against incorrect salary statements and unjustified warnings.
- If you take out legal protection insurance for traffic accidents, your insurer will pay the costs arising from your participation in road traffic. Typical disputes are proceedings against unjustified points or claims for damages after an accident.
Who needs legal expenses insurance?
Whether legal protection insurance is worthwhile for you depends on your individual situation. Therefore, ask yourself whether and in which areas of your life you could face legal trouble. Do you drive your car every day or are you threatened by legal disputes around your workplace? Then it may make sense to take out traffic or employment legal protection. If, on the other hand, you don't own a car and have a secure job and a fair employer, insurance coverage is less worthwhile.
How useful legal protection insurance is for you also depends on how likely you think it is that you will need a lawyer or have to go to court. The more likely this is, the more urgently you need legal protection insurance.
When does private legal protection insurance not pay?
Your legal protection insurance reimburses the costs of contractually agreed disputes. Nevertheless, it is not an all-round carefree package in connection with the insured disputes. If the conflict that triggered the costs already existed before the insurance contract was concluded, the insurer will not pay.
In addition, you have to wait about three months before you can claim insurance benefits. The waiting period is intended to protect the insurer against you taking out insurance only after costs and legal disputes have been announced. Only in connection with traffic accidents, your legal protection insurance is available to you without a waiting period.
Please note that there are cases in which legal protection insurances generally do not pay. These are:
- defense against claims for damages due to breach of contract
- Disputes in the areas of construction, construction financing as well as house, apartment and land ownership
- disputes concerning trademark, copyright and patent rights
- Intentional criminal acts
- Legal disputes relating to speculative investments, gambling and betting contracts
- disputes in connection with commercial or self-employed activities
- out-of-court disputes with social security or tax authorities
- The cases in which insurance coverage is excluded can vary from insurer to insurer. Therefore, take a close look at the insurance conditions and consider which offer suits you best. My team and I will be happy to help you compare different legal protection offers.
What does legal protection insurance cost?
What your legal protection insurance costs depends on which insurance package you choose. You can get a traffic legal protection tariff for around 70 euros per year. If you opt for a legal protection insurance that covers several areas (professional, private, traffic and criminal legal protection), the insurance will cost at least 200 euros per year. The following applies: The more legal areas the insurance covers, the more expensive it is.
Finding the right tariff - what you should bear in mind
If you have decided to take out legal protection insurance, it is important to compare the rates of several providers. The one tariff that suits all insured persons does not exist. When making your choice, pay attention to the rate details that are important to you personally. But don't choose the first provider that meets your rate requirements - pay attention to the following points as well:
- Coverage - Choose a plan that offers coverage in other EU countries and for a limited time worldwide. This way you are also well protected when traveling
- Mediation costs - Not all disputes end up in court. Therefore, choose a tariff that also covers the costs of out-of-court mediation proceedings. The insurance should pay at least 3,000 euros for mediation proceedings. This allows you to settle disputes faster and without going to court.
- Free telephone consultation - Choose a tariff that includes a free telephone consultation on the insured areas of law. This way, you'll get expert help quickly if legal problems arise
- Low deductible - Make sure your chosen plan has a deductible of no more than 250 to 300 euros. A deductible lowers the insurance premium. However, it should be low enough and not prevent you from taking legal action in the event of a dispute.
- Insured persons - Check whether a family contract is an alternative for you. Family tariffs allow you to include a spouse or partner and underage children in the insurance at a reasonable price.
- Short waiting period - Make sure that your tariff provides for the shortest possible waiting period. The shorter the waiting period, the sooner you can claim benefits from the insurance company after signing the contract.
Are there alternatives to legal protection insurance?
If you decide not to take out legal protection insurance, you are not without protection in connection with many legal disputes. Although the alternatives do not offer the comprehensive protection of a legal protection insurance - they are a real relief in case of emergency:
- If you are a tenant, the tenants' association can help you with all aspects of tenancy law. For a membership fee of 50 to 100 euros, you can get legal protection insurance for tenancy law. In case of problems with the landlord, this insurance covers your legal advice and finances the necessary help to enforce your rights.
- If you are a house or apartment owner, you can become a member of the property owners' association. This association offers legal advice and legal representation for your property.
- If you are a member of a trade union, you can make use of the legal protection offered by your trade union in the event of problems relating to your employment relationship.
- If you have claims for damages against you, these can be handled by your private liability insurance.
- If you have a low income, you can resort to legal aid in the event of legal disputes. Further information on this and on the possibility of obtaining free legal advice in the event of out-of-court disputes can be obtained from your local court.