Is legal insurance your best defence?

Insurance coverage for unforeseen legal costs may not seem as important as death or disability coverage, but it could save you money at a time when you are legally most vulnerable. Many insurance companies offer partial legal assistance and others will offer you more holistic coverage. We look at your options for this:

Which legal cover suits your needs?

LegalBest, one of South Africa’s leading legal insurance services providers, specialises in legal coverage and you get access to legal services from qualified lawyers. Their services also include telephonic legal advice, drafting of standard agreements, debt related matters ( e.g. judgements and administration orders), divorce, child maintenance and custody cases, bail applications and defence in criminal matters.

“Depending on your case the fees for a lawyer can cost up to R15 000. Like any other coverage, legal insurance gives assistance for these expensive unforeseen circumstances,” says LegalBest spokesperson, Gontse Mashego.

Hollard also offer a legal plan for legal advice and financial assistance. According to Hollard legal insurance is important to minimise stress when facing conflict with another person or company. Hollard’s services cover criminal matters such as murder, rape and robbery. Civil matters related to motor vehicle accidents, road accident fund claims and even neighbour disputes are also covered and they offer assistance for labour related matters like disciplinary hearings and unfair dismissals.

An insurance company like the Automobile Association offers legal advice to their members for matters related to road traffic laws, insurance, warranties, guarantees, the purchase and sale of vehicles, accident damage recovery claims and other motoring issues.

Old Mutual also offers legal insurance under the iWYZE personal liability and legal insurance umbrella cover. Legal assistance is available when a civil action is brought by or against you and provides legal defence when criminal charges are brought against you. With their coverage you get representation at any inquest (e.g. a post mortem) where the circumstances of death are unclear or questionable.

Is legal insurance worth the coverage cost?

At Hollard, you can receive between R120 000 and R200 000 coverage per matter for premiums that start at R120 per month. LegalBest’s premiums range from R35/month for R35 000 worth of annual coverage to R85 for R85 000 yearly coverage. According to Mashego, legal insurance is useful for expensive legal processes involved in litigation.

“Criminal trials can be lengthy and therefore costly. Some cases take up to five years and in that time you need to pay a lawyer. Depending on the type of case a consultation fees alone can cost you between R3 500 and R 5000. Without legal insurance you could end up paying R10 000 from your own pocket,” says Mashego.

What are the exclusions?

It pays to play nice with your spouse even in divorce where insurers like LegalBest, exclude claims for contested divorces. Mashego says where uncontested divorce usually entails a legal agreement drawn up on a contract, the fees for a contested divorces will cost more because it usually goes to the high court.

Costs that are incurred from legal matters prior to taking out insurance will also be excluded from your claim.
For such reasons Mashego advises that you read through the terms of exclusions very carefully to make sure your case won’t be viewed as a liability to your insurers when you need to claim.