Legal Insurance – A necessity or worth the risk?

Legal Insurance – A necessity or worth the risk?

11:14 AM, 3rd June 2021, About 6 months ago 4

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I have a small property portfolio and also insurance policies for my home, car, horsebox, pets etc etc. Each policy offers the addition of legal fees for around £35. I suppose my first question is, how necessary is this insurance for rental properties?

I’ve never needed to make a claim (if I had a policy), but am aware of the huge potential costs.

And then, rather than add £35 to each policy, is there a standalone policy I could buy that covers me for any/all legal fees in any scenario?

Thanks

Debbie



Comments

by Tim Rogers

12:10 PM, 3rd June 2021, About 6 months ago

It's one of those questions that comes back to your peace of mind. Hopefully you will never need to use it, but if you ever are in a situation where you need legal input, you'll be very grateful you have it. A basic, newly qualified, solicitor will charge £200 per hour. You really don't want to know what a QC will charge.

Given the rental revenue compared to the cost of the cover, ( £35 per annum), compared to the potential costs. I don't think there is much of a decision here.

Even if your household insurance would cover you for a BTL case, I'd still take the property specific insurance option to be certain.

by Judith Wordsworth

14:00 PM, 3rd June 2021, About 6 months ago

Check each of the policies to see exactly what is and isn't covered. Might save you £1,000s in the future if the cover is right

by Jason McClean

16:54 PM, 3rd June 2021, About 6 months ago

Hi Debbie

Landlord legal insurance is fairly specific in that it covers tenant disputes, rent arrears, evictions and other landlord related requirements. It is not usually as broad as normal legal expenses in that it may not cover property disputes.

You normally need policy one per tenancy. There is no single portfolio legal insurance I am aware of right now but I do know a provider that is hoping to supply one to us within 6-months.

Is it worth having? In my opinion the legal helpline that comes with such policies is normally worth its weight in gold if you ever need advice on any landlord related legal matter. That removes anxiety quickly and lets you progress.

Any legal expense policy will only back you up if you have a 51% chance of wining the case or better. They will not take on lost causes.

It does come down to what cost peace of mind. Hopefully this helps.

by Paul Shears

19:56 PM, 3rd June 2021, About 6 months ago

I have had independent legal cover for decades as well as legal advice cover.
I have made very little use for it over that extensive time frame.
This is what I found:
1. The advice line simply lacked the attention span to input the necessary information and kept interrupting my conversation with a determined insistence on censoring the facts. In doing so they made it utterly impossible to discuss anything at all at anything like an intelligent level because they had an absolute corporate defined process of only discussing one tiny fact at a time. So no interpretation or understanding possible. This effectively removed them from ever taking responsibility for anything including offering any advice because they were procedurally required to never comprehending anything beyond a sound bite.
2. An actual claim on a legal matter was refused as a typical moronic corporate traffic light (weighting) system apparently predicted that the chances of winning a case were not sufficient to attempt to pursue it. This can be at any threshold, not necessarily 51%, that they decide and you have no right of redress.
This has absolutely nothing to do with morality.
So you pay for a service but have absolutely no say in whether you will ever get any output beyond a cross charged fee to your insurance company from a lawyer.
So what is my advice based on my own lengthy experience?
I simply do not have any, beyond the idea that you may sleep better if you thought that paying a relatively small fee might do you some good in the event that you need legal advice or representation.
It will not increase your chances of avoiding a huge legal fee beyond a theoretical threshold set by people outside of your control or influence.
Your company may well weigh up their own success rate against the others sides and decide to back off on that basis alone.
Big money buys heavy-weight brains.
The people that you will interact with will operate at the most basic helpdesk level.
I choose to pay but not optimistically.


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