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Expensive lawyers, incomprehensible paragraphs and strict judges can turn a legal dispute into a nightmare, even if you are in the right. A suitable legal protection insurance should take away this horror. Basically the policies promise to cover all the costs of the lawsuit. This is how this insurance is generally understood. However, in detail and in practice it looks quite different. Legal protection insurance rarely covers all risks and is uneconomically expensive with such a broad coverage. Because of all the potential limitations, legal expenses insurance should only be purchased after carefully reviewing all clauses. However, the right contracts can really be worth their weight in gold in the right situations. Use however all possibilities around not only in the case of emergency, but also with the premiums to save.

Tip: With an appropriate calculator, the comparison, for which we offer information here, is particularly easy!

Note: In the first place, in this article we deal with the insurance benefits for individuals. Only in some sections we mention hints for entrepreneurs and certain professions.

What are the different components of legal protection insurance?

Every policyholder needs to keep in mind that there are many different types of litigation that can occur. Sometimes it is a matter of family law and in other cases it is more a matter of labor law or a patient sues a hospital. Because of this variety of judicature resp. Jurisprudence, it is very difficult to choose a legal protection insurance that covers every potential case in court. However, the Austrian Chamber of Labor has also found that many so-called modules of modern legal protection insurance offer a kind of double protection and are therefore only expensive, but not useful. For this reason, a selection must be made with great care. The main standard building blocks are:

• Compensation law
• Employment law
• Lease Law
• Contract law
• Criminal law
• Family and inheritance law
• Traffic law

Possible additions that insurance agents like to offer would be, for example, patient law. Now the question arises whether the patient's right is not anyway compensated by the tort law, since a patient only sues if he has suffered damage by a hospital or a doctor. It is thus almost legal understanding necessary, in order to put together the correct legal protection, although these insurances are to protect exactly against the need for this knowledge. Nevertheless, an appropriate insurance is profitable if it is considered what benefits it can provide. For the exact choice of the coverage we still give hints.

Warning: In the family law module, unfortunately, the fees for divorce proceedings are not covered. However, legal expenses insurance does pay for advice on this issue.

What costs are covered by legal expenses insurance?

Any number of cost items can be incurred during a lawsuit. First, the court itself charges fees for the hearing. Lawyers are working for anything but free. Expert witnesses must be consulted in many cases and charge money for their opinions. Interpreters may be necessary for witness statements. In addition, legal protection also pays the fees for advice on whether a lawsuit is worthwhile at all or for appropriate mediation to avoid the lawsuit. Payments to the opposing party in the event of a loss are also covered by legal protection insurance in the worst case scenario. Thanks to all these benefits, if an emergency occurs, the right insurance can prevent financial ruin – both personal and professional.

Note: Advice often also clarifies whether legal proceedings have a prospect of success. In the event of a negative decision regarding this issue, the insurance company will not pay for any proceedings.

What is the cost of legal expenses insurance?

Now that we know what legal protection pays for, the question arises as to what premiums these benefits are offset by. The rates, depending on the modules, are between 250 and 400 euros per year. Compared to the expenses in a serious case, these expenses seem rather low, but too much should not be paid under any circumstances.

Note: Especially when the risk of claims increases, as is the case with legal expenses insurance for certain professions, premiums also increase dramatically

How should the building blocks for legal expenses insurance be put together?

When it comes to the exact protection, the policyholder only has to ask himself a few important questions:

• Can there be legal disputes in one's own family, perhaps concerning an inheritance, or have all questions in this regard already been settled?
• Can there be disputes with the landlord or is already long lived in the property?
• Can there be disputes with the employer or is it anyway worked independently?
• Can there be conflicts because of the own property or is such an asset not even in the own property?
• If there can be accidents and resulting legal proceedings because of the own motor vehicle or no car is driven at all?
• … and potential problems with contracts, claims for damages, with authorities and in criminal terms can always arise!

Especially the last cases should actually always be covered. The annual premium can be reduced by omitting other modules. As with any insurance, it is a balancing act between overinsurance and underinsurance.

Tip: Compare exactly the individual packages of the providers. Often, additional protection does not necessarily cost more and sometimes there are large price differences.

Note: If legal protection insurance becomes necessary for professional reasons, then it is clear anyway which protection is necessary. In the real estate sector, coverage must be provided against static defects, in the medical sector against corresponding errors, etc.

What add-ons need to be considered for legal expenses insurance?

In legal terms, there can always be a snag. Unfortunately, this does not behave differently with the associated insurances. There are a number of exclusions for which the legal protection insurance does not cover. These cases are sometimes extremely rare:

• Claims arising from armed conflicts or incidents involving nuclear energy
• Cases of copyright law, antitrust law, tax law or insolvencies
• Disputes with other insurance companies
• Acts committed intentionally

Note from the Austrian Chamber of Labor: Especially with newer contracts, legal disputes regarding the assessed assets are often excluded. This is a reaction to the numerous cases after the financial crisis.

In addition to these expenses, which have been excluded depending on the contract, some other additions must be taken into account. For example, as in the case of supplementary dental insurance, there is usually a waiting period before the insurance cover takes effect. So if a court case is pending, it is not possible to take out a corresponding insurance policy quickly. In addition, not every policy offers a free choice of lawyer. Such criteria can be very helpful in the comparison, as they give the overview more contrast.

Note: When changing the legal protection insurance, there may be a period during which there is no protection, because the new insurance does not apply immediately.

In addition, it must also be clearly defined where and for whom the legal protection insurance applies. If numerous trips abroad are a regular occurrence, then legal disputes may arise there as well, which are even more complex because foreign laws apply. Legal protection for abroad makes particular sense in these situations. As a rule, the insurance cover is taken out for the entire family, since it is precisely the offspring who can get into problems. But if fewer people are insured, the annual premium will fall. If all of the above points are taken into account and the correct modules are selected, then the legal protection insurance will ensure a peaceful, carefree night's sleep, despite all of its tricks.

: Pay attention to clauses regarding the repayment of discounts granted and cancellation rights for the insurer in the event of a claim!

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