Legal expenses insurance is intended to provide legal support in the event of a legal dispute. You pay a monthly or annual premium to be assured of help if you need to take legal action. But what if your legal expenses insurer refuses to provide assistance? It can be an unpleasant situation, especially when you are faced with a conflict and urgently need legal help.
In this comprehensive article, we discuss the most common reasons why a legal expenses insurance claim is refused, and what you can do if this happens to you. We also provide advice on the options you have to still obtain legal assistance.
What is legal expenses insurance?
A legal expenses insurance provides coverage for legal assistance in disputes. This can range from employment disputes, contract disputes, personal injury, consumer rights to traffic accidents. By taking out legal expenses insurance, you gain access to legal assistance without immediately having to incur high attorney’s fees.
Reasons why your legal expenses insurance may be denied
There are several reasons why your insurer may decide to refuse legal assistance. Below we explain the most common reasons:
1. Calling on legal assistance too soon
Many legal expenses insurance policies apply a waiting period, often three months, from the policy start date. This means you cannot call upon legal assistance for problems that arise during this waiting period. This clause is intended to prevent people from taking out insurance only when they already know a conflict is coming.
2. Dispute falls outside the coverage
Not all legal disputes are covered by your legal expenses insurance. It is important to read the policy terms carefully when taking out the insurance. Common exclusions include divorces, business disputes, or pre-existing conflicts at the time the insurance is taken out.
3. Chance of success too small
Sometimes an insurer refuses to provide legal assistance because they consider the chance of success too small. Insurers often have a ‘reasonable prospect of success’ clause in the policy terms. If they judge that the case has little chance of success, they may decide to deny coverage.
4. Hiring your own lawyer
Although in certain cases you have the right to choose your own lawyer, many legal expenses insurers want you to use their in-house legal experts or lawyers. This helps the insurer keep costs down. If you hire an external lawyer yourself without the insurer’s permission, coverage may be denied.
What can you do if your legal expenses insurance is denied?
If your legal assistance has been denied, there are several steps you can take to still get legal help.
1. Ask for a second opinion
When your legal expenses insurer rejects your case due to insufficient prospects of success, you can make use of the disputes procedure. This means that you can, at the insurer’s expense, engage an independent lawyer for a second opinion. If this lawyer concludes that there is indeed a reasonable chance of success, the insurer must still provide legal assistance.
2. The objectivity clause
The objectivity clause gives you the option to hire your own lawyer if you disagree with the insurer’s decision. If the lawyer confirms your position, the insurer must reimburse the costs of this legal assistance, regardless of the outcome of the case.
3. Internal complaints procedure
If you disagree with your insurer’s refusal, you can file a complaint with the insurer itself. Many insurers have an internal complaints department that will reassess your situation. This can sometimes lead to a reconsideration of the decision.
4. Financial Services Complaints Institute (KiFiD)
If you are not satisfied with the outcome of the internal complaints procedure, you can submit your complaint to the Financial Services Complaints Institute (KiFiD). This independent institute handles complaints between consumers and financial institutions, including legal expenses insurers.
5. Lawsuit against the insurer
If all of the above steps do not provide a solution, you can choose to initiate legal proceedings against your legal expenses insurer. In this case, it is wise to engage a specialized lawyer to assist you in this matter.
How can you prevent your legal expenses insurance from being declined?
Prevention is better than cure. Here are some tips to prevent your legal expenses insurance from being declined:
- Read the policy terms and conditions carefully: Make sure you know exactly what is and is not covered by your insurance.
- Report new disputes immediately: Report new legal issues to your insurer as soon as possible, but be aware of the waiting period after taking out the policy.
- If in doubt, ask for advice: Are you unsure whether your dispute is covered? Then contact your insurer immediately to verify this.
Conclusion
Legal expenses insurance provides important legal protection, but there may be situations in which your insurer decides to refuse coverage. Whether it concerns a waiting period, exclusions in the policy, or a lack of prospects of success, it is important to know what your rights are and what steps you can take when faced with a denial. Engaging an independent lawyer or following a dispute resolution procedure can help you still obtain the necessary legal assistance.
Do you have questions about your legal expenses insurer’s refusal or do you need help obtaining legal assistance? Then contact the experts at Arslan & Arslan Advocaten for free and non-binding advice. We are ready to help you!
Contact Onur Arslan:
- Phone number: 0103115500
- E-mail: [email protected]
