{"id":30589,"date":"2024-01-14T21:23:14","date_gmt":"2024-01-14T20:23:14","guid":{"rendered":"https:\/\/www.fiala.de\/?p=30589"},"modified":"2026-06-22T21:43:31","modified_gmt":"2026-06-22T19:43:31","slug":"private-legal-expenses-insurance-an-introduction","status":"publish","type":"post","link":"https:\/\/www.fiala.de\/en\/private-legal-expenses-insurance-an-introduction\/","title":{"rendered":"Private Legal Expenses Insurance \u2013 An Introduction"},"content":{"rendered":"\n
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Well covered, whatever happens?<\/h2>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n
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In a complex society, the need for legal protection is ever-present. A private legal expenses insurance<\/strong> policy can act as a potentially reliable safeguard, stepping in across a wide range of situations involving legal problems<\/strong> and disputes<\/strong>. Whether in employment-law conflicts, road-traffic altercations or questions surrounding tenancy law, this type of cover offers fundamentally solid protection<\/strong> and the reassuring sense of being on the safe side legally. Even so, it is worth shedding light on the „downsides“ and disadvantages<\/strong> of such a policy which, contrary to what the name might suggest, does not<\/strong> cover the legally necessary steps of, for example, a legal dispute<\/strong> without limit. <\/span>Read on to learn how a private legal expenses insurance<\/strong> policy can help you uphold your rights, and how making a claim on the policy plays out in everyday legal practice<\/strong> when working with a lawyer and, where applicable, the courts. <\/span><\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n

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What does a private legal expenses insurance policy cover?<\/span><\/span><\/p>\n<\/h3><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n

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As a basic point, a private legal expenses insurance<\/b> policy can make it easier to enforce a legal claim and often makes certain proceedings financially viable<\/b> in the first place. After the matter has been set out and discussed in advance, the insurer frequently covers costs<\/strong> that can arise<\/b> in the run-up to a legal dispute<\/b>. These include, among other things, sound legal advice, the possible use of court-appointed experts, and the necessary work of a legal adviser of your own choosing<\/b>. <\/span><\/p>\n

It is important<\/b> to note here that, before<\/u> instructing a lawyer, you must always ensure that you have a written confirmation of cover<\/b> from your insurer for your case. To this end, as already mentioned, the insurer should be supplied in advance with a complete – ideally chronological – account of the matter and all the relevant documents<\/strong>. The insurer is legally entitled to a detailed account<\/strong>, since it must form a view as to whether an insured event<\/strong> exists. <\/span>If that is not the case, we expressly advise against instructing a lawyer without sufficient own financial means. <\/span><\/p>\n

If, after careful examination<\/b> by a lawyer and attempts to reach an out-of-court settlement with the opposing party, matters do proceed to a legal dispute<\/b>, the insurer will usually also bear a large part<\/b> of these costs. Depending on the policy, however, cover is frequently capped at an agreed sum insured.<\/strong> <\/span><\/p>\n

Caution:<\/b> Private legal expenses insurance policies usually do not cover all risks, and the decision for or against such cover calls for a careful review<\/strong> of the policy in light of your own needs and circumstances<\/strong>.<\/span><\/p>\n

Billing with the insurer is, as a rule, handled by the legal adviser you have chosen, who should be experienced in dealing with insurers<\/b>. An advance payment to the legal adviser is customary and is frequently set off against the benefits of the legal expenses insurance, where covered.<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n

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What to look out for in your legal expenses cover<\/h3>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n
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The decision in favour of legal expenses insurance should be carefully considered in advance<\/strong>. It is worth also thinking about alternative sources for enforcing legal claims, such as trade unions<\/strong>, property owners’ associations<\/strong> or tenants’ associations<\/strong>, as well as liability insurance<\/b>. <\/span><\/p>\n

If you do decide on a private legal expenses insurance policy, we advise you to compare providers and insurance products extensively. The quality of a legal expenses insurance<\/strong> policy often shows in the detail. Make sure that the applicable general insurance conditions<\/strong> for the legal expenses cover contain no provisions that are less favourable from a consumer perspective than the „General Conditions for Legal Expenses Insurance“<\/strong> (in German „Allgemeine Bedingungen für die Rechtsschutzversicherung“, ARB for short) published on a non-binding basis by the German Insurance Association (Gesamtverband der Deutschen Versicherungswirtschaft e.V.)<\/strong>. Written confirmation from the insurer is recommended. <\/span><\/p>\n

In addition, you should pay attention to the following clauses:<\/span><\/p>\n

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1. Sum insured:<\/span><\/h4>\n

The sum insured should be at least EUR 300,000<\/strong>, and the so-called objection procedure should be contractually agreed<\/strong>. The background is that some insurers reserve the right to pay only once a dispute goes to court<\/strong>. In such cases it is important that the legal fees<\/strong> for the preceding so-called objection procedure<\/strong> are covered, in order to avoid going to court<\/strong> at all.<\/span><\/p>\n

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2. <\/span><\/span>Waiver of the pre-contractual defence:<\/span><\/span><\/h4>\n

A clause covering legal disputes that arose before the start of the contract is advantageous. The condition is often that the contract has already been in place for at least five years.<\/span><\/p>\n

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3. The arbiter’s decision (Stichentscheid):<\/span><\/h4>\n

The so-called arbiter’s decision (Stichentscheid)<\/b> as a contractual component also provides legal certainty in your policy. Where there are doubts about the prospects of success of a legal dispute, the insurer may <\/span><\/span>refuse to assume cover<\/b>. Agreeing an arbiter’s decision can help to obtain cover after all. It is binding on both parties and can be drawn up by your own lawyer<\/b>. The costs<\/strong> for this must be borne by your insurer<\/b> regardless of the outcome of the decision<\/b>. Should this arbiter’s decision turn out negatively for you as the policyholder, you nevertheless still have the right to bring a coverage action<\/strong> against your insurer.<\/span> <\/span><\/span><\/span><\/p>\n

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4. Waiting periods:<\/span><\/span><\/h4>\n

Last but not least, you should also take the i<\/strong>nsurance-specific waiting periods<\/b> of the providers into account in your choice. It is quite common for <\/span>waiting periods to apply before<\/b> the legal expenses benefits can be claimed<\/b>. These vary from insurer to insurer<\/b>. In most cases the waiting period is three months<\/b> from the start of the contract. It is important to note that the cause of the legal dispute may only arise after this waiting period has elapsed.<\/span><\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n

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More interesting articles on the topic of legal expenses insurance<\/h2>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section>\n
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