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Legal protection insurance: How to find the right legal protection cover

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What is legal expenses insurance?

If a dispute goes to court, costs are automatically incurred. If you win the court case, the opposing side is obliged to pay these costs. If you lose, however, legal expenses insurance kicks in and covers the payment of fees and costs - both yours and those of the opposing side.

What does the legal protection insurance cover?

The following costs are usually included in legal protection:

  • Costs of proceedings: lawyer's fees, court fees
  • Fees of the opposing party: in the event of a lost lawsuit
  • Expenses: fees for witness compensation, expert opinions and interpreters
  • Expenses abroad: translation and travel expenses for cases abroad
  • Deposits abroad: an interest-free loan is granted for this purpose.
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Especially with legal protection insurance, it depends on what is insured and what benefits you include in the policy. Most insurers offer various modules that allow you to put together a package tailored to your needs. An all-inclusive package is the simplest, but certainly the most expensive option.

The advantage of the modular principle is that you only pay for the insurance items you actually need. However, this also means that it is more than worthwhile to look at the individual modules and weigh up whether you need them. What legal protection insurance covers can be divided across the board into the areas of private, professional, residential and traffic legal protection.

Our legal protection insurance comparison determines the tariffs that fit your needs after only a few details. First, we need information about you, your place of residence and your profession. Then follow questions about the desired insurance coverage and previous claims. You then decide whether the legal protection insurance should cover professional conflicts, traffic matters and/or rental matters. You can also choose whether you want to be shown the best or the cheapest rates.

By pressing the button "compare" the calculator starts its work and shows you the suitable tariffs.

In the next step, you can refine your selection according to the modular principle, i.e. decide which areas you want to cover according to your needs. To do this, simply click on the desired fields, such as free legal advice by telephone or co-insurance of adult children. These additional benefits will of course change the rates displayed.

To ensure that the results displayed match your requirements, we explain some details about the required information below.

Personal details

Information about your person and living situation is required: Your zip code influences the price structure for some providers, since statistically the risk is distributed differently by region. Your age and family situation also influence the risk assessment.

Discount-relevant information

In order to receive particularly accurate offers and possible discounts, it is also useful to enter whether you are switching from another legal protection insurance policy, i.e. whether you have a so-called prior insurance policy, and whether you have already had claims that were relevant for legal protection. This information will determine when the new insurance will take effect and the probability of an insured event occurring. If you have had prior insurance for years without a claim, you may receive a more favorable rate.

Optional detailed questions about legal protection

If you wish, you can specify additional details about the insurance coverage you want. This includes waiving the defense of pre-contractuality after 5 years. This tariff detail ensures that damages that were caused before the start of the insurance but only became apparent later are also covered. This is relevant, for example, in the case of undiagnosed illnesses, when it is necessary to clarify insurance coverage for their treatment after the fact. The more options you select, the greater your insurance coverage will be and the higher the premiums will rise.

That depends on your circumstances and what is important to you. Many insurers offer all-around coverage. This sounds comfortable and it is - all claims are covered in one insurance policy. But it pays to take a closer look and rather put together an offer that is precisely tailored to your own needs and requirements. This can significantly reduce costs. Therefore, it is important to first get an overview of what legal protection insurance is available and see which legal areas you want to cover. The following modules are available from all providers and make sense for most insured persons.

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In August 2020, Stiftung Warentest found that the price differences between the various providers of legal protection insurance are considerable - everything from $180 to $600 per year. And it doesn't necessarily have to be the expensive ones: Because in the test also favorable legal protection insurances cut off well. It is therefore worthwhile to inform yourself and compare the various offers. The following variables can be decisive in calculating the costs of legal protection insurance:

Coverage amount: the insurance only covers the costs up to the insurance amount agreed in the policy. If the costs exceed this, you must pay the difference. The legal protection insurance test recommends agreeing on at least $300,000 as a coverage amount.

Deductible: The price of the insurance policy also depends on whether or not you agree to a deductible in the event of a claim. The higher the deductible, the lower the insurance rate. Stiftung Warentest advises a deductible of $150, as this sum offers the best discounts in relation to legal protection insurance without a deductible on the one hand and higher deductibles on the other.

Installment intervals: You can also save money if you pay the policy annually rather than monthly. Some insurers even offer five-year contracts, which are then even cheaper. We have also taken this into account in our quotation form.

The question of when legal protection insurance is worthwhile cannot be answered in general terms. It depends on your personal needs and circumstances. If you travel a lot by car, for example, legal protection in the area of traffic can make a lot of sense.

However, before taking out legal protection insurance, check whether existing policies already cover similar risks. Below you will find an overview of the classic claims that legal protection insurance covers. In addition, an overview of insurance policies and memberships that duplicate legal protection in some areas.

Examples of situations in which legal protection applies

  • If you want to cover yourself for legal disputes with your employer. In the event that the latter issues a bad reference, issues a warning or threatens termination.
  • If you regularly participate in road traffic as the owner, renter or driver of a vehicle, for example as a commuter.
  • If you fear disputes about insurance benefits from health or occupational disability insurance. In this case, legal protection insurance is just as important as the aforementioned insurance benefits themselves.
  • If you fear disputes with your landlord about cosmetic repairs, utility bills or rent increases, legal protection insurance makes sense.

Attention to exclusions

The areas of inheritance law and divorce are usually only included in the legal protection insurance to a limited extent, e.g. in that only an initial consultation is paid for. There are also restrictions for tax legal protection. Legal disputes with builders are not included at all (for this you can take out separate legal protection for builders) and disputes about money and capital investments.

Memberships and insurance policies that may include legal protection.

In addition, check whether you have not already covered individual risks through memberships in associations or unions, such as

  • the tenant protection association,
  • the property owners' association,
  • a trade union
  • a professional association
  • or an automobile club.

These often have comprehensive legal advice that won't cost you a penny extra.

In addition, private liability insurance and occupational disability insurance can already cover all necessary areas for many policyholders. Therefore, first compare whether the risk you want to cover may already be covered with one of these options.

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The US Insurance Association has published non-binding "General Conditions for Legal Expenses Insurance," which serve as a good benchmark. The conditions contained in the 35-page paper should be considered a minimum standard. They include, for example

  • Descriptions of the individual areas of insurance,
  • a list of the costs that will be covered,
  • a definition of when a claim occurs
  • and stipulations on possible exclusions from insurance coverage.

As a rule, insurers adhere to the described conditions in their contracts.

Stiftung Warentest reviewed 53 providers in August 2020 and concluded that the best legal protection insurance should always offer coverage for many situations in life. In addition, the good providers always provide assistance beyond the minimum legal protection, for example with social welfare authorities, tax offices, but also with legal issues around inheritance or divorce. Some providers also provide assistance in the event of a pre-litigation dispute rather than in the event of court proceedings. They then also pay a mediator to bring about a settlement.

In addition, the offer should contain as few exclusion clauses as possible, which helps to maintain an overview and prevents unpleasant surprises.

In addition to the features already mentioned, Stiftung Warentest believes the following clauses and options are advantageous:

  • Stitch decision: The stitch decision should be regulated in the contract. If the insurer does not believe in the success of a pending lawsuit, it can refuse to take over the insurance coverage. Your lawyer can describe the prospects of success with the help of a reasoned opinion. A casting vote by an expert will then decide who is in the right. In any case, the costs are borne by the insurer. This option is better than arbitration, where the insurer hires a lawyer.
  • Objection proceedings: An objection procedure often occurs in social, tax and administrative law. Insurers often do not pay here until the dispute goes to court. If the insurance company also pays the attorney's fees for an objection procedure, court proceedings can be avoided.
  • Pre-contractuality: With the pre-contractuality clause, the insurer agrees to pay the costs even though the cause of the legal dispute lies before the insurance policy was taken out. Then the legal protection insurance applies retroactively. This is particularly useful in the case of disputes about occupational disability insurance, since here the cause of damage regularly lies before the date on which the policy was taken out.
  • Ombudsman: The insurance industry ombudsman is a recognized private arbitration body. It can help to settle disputes with the insurance company. If the policyholder accepts the ombudsman's recommendations, they are binding on the insurer. However, not all insurance companies are members of the arbitration board.

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