What does private legal expenses insurance mean?
Private legal expenses insurances help the insured person in legal matters relating to their daily life. This could be a dispute with your landlord about the rent, problems with your boss or a conflict with your neighbour. However, lawyers and court costs are expensive and a lot of people don't claim their rights because they fear the costs. A private legal expenses insurance will allow you to claim your right without facing enormous financial burdens.
What costs does it cover?
A private legal expenses insurance covers the entire (potential) litigation process, i.e. lawyer and costs. It serves three main purposes:
Additional incidental expenses such as witness fees, deposits or expert and specialists costs are also taken over by the insurance company. In the most common modules, the coverage sum is usually unlimited. Smaller sums are usually offered for add-ons.
This insurance covers costs for legal disputes, but costs for legal consultation only to a limited extent. There are often hotlines from the insurance carrier itself that you can use for legal questions. In-depth consultation with a lawyer in person, for example for contract checks or asking for advice when buying property, is not covered.
The four main modules of private legal expenses insurance:
This insurance comes in several different forms. There's no "one size fits all" plan, but your policy can be extended and modified for your personal needs. However, there are four main modules, which cover the most common needs.
Private: This module has to be selected as a basis for most plans. Covers everything around your private life such as purchases, poor repairs, tax law and much more.
Living: Covers everything regarding living in a home, whether as a tenant or in your own home, but not as a landlord. Examples are rent disputes, quarrels with neighbours/Hausverwaltung, etc.
Employment: Covers the relationship between you and your employer. This could be unjustified dismissal and warnings, dispute or salary, inadequate employment certificates or other cases. This module does not cover freelance/self-employed work.
Traffic: Mostly relevant as a frequent car driver/motorcyclist, no matter if you own a vehicle or regularly use car sharing. This module protects you against all disputes that may arise from participating in public traffic. Also covers you as a passenger on public transport, pedestrian or cyclist.
In addition to the four main modules, there are a variety of extensions that must be added individually as additional modules and are not covered in the four main modules.
Internet-related coverage: This means different things depending on the insurance carrier, but usually it is about cases such as copyright disputes, cyberbullying, data privacy, etc.
Extended criminal law: If you are accused of an intentional offense (such as theft), most legal expenses insurances do not apply as they only cover negligent criminal offenses. This module extends your protection in this regard until final judgement in court.
The following extensions are possible, but only with long waiting periods and are only covering if your case is decided in front of a German family court:
Alimony/child support: Covers cases related to childcare, custody, alimony payments and so on.
Marriage/divorce law: Covers all cases involving marriage disputes in front of a German family court.
Inheritance law: Covers all issues that revolve around inheritances, e.g. wills, acceptance or rejection of an inheritance, etc.
Important aspects: Waiting period & co-payment
There are a few particularities with regard to this insurance, that you should know about when considering to take out a private legal expenses insurance.
Waiting period: For many modules a standard waiting time of three months applies, meaning that you will not be able to access the services until three months after the insurance has been taken out. Any legal dispute starting before the waiting period is over will not be covered. Contracts you signed before the waiting period/having the insurance are also not covered.
Deductible/Co-payment: Your deductible or co-payment is the amount you pay before your legal insurance provider pays. There are fix and flex models: 150/300 € flex means that you pay 150 € for a lawyer from the list provided by the insurance and 300 € if you choose your own lawyer. If your deductible is not a flex model, you can choose any lawyer you want with a fix deductible.
Who is insured?
Most insurance companies offer different policies for single people and families. Family plans cover for you and your (marriage-like) partner/wife/husband as well as children living in the same household. Depending on the provider and plan, parents and grandparents living in the same household are also insured.
Claims process:
When facing a legal problem, the first step should be an initial consultation with the legal insurance carrier, which is free of charge for most plans. It is discussed how to proceed further and if you have coverage for the case, you will then be able to go to a lawyer in person to proceed with your claim.
