Legal expenses insurance: When it is worthwhile

In short: Legal expenses insurance covers lawyer and court costs in agreed areas; it is worthwhile mainly for traffic, work and housing, if you factor in the deductible.

In more detail: Anyone who wants to enforce their rights often needs a lawyer and a court, and that costs money. The insurance then pays costs by modules, but only in insured areas and after waiting periods. Amounts and rules change; check the current status with the responsible body.

In Depth

Typical modules

• Traffic legal cover (accident, fines, driving licence)
• Private legal cover (contracts, purchase, travel, damages)
• Employment legal cover (dismissal, employment contract, warning)
• Housing/tenancy legal cover (dispute with landlord or tenant)
• Optional: tax, criminal, victim legal cover Those with children or a partner can choose family cover; trainees are often co-insured through their parents as long as they are unmarried and in training.

What is not covered

Usually excluded: intentional offences, disputes with your own insurer about contracts after the waiting period, construction law, capital investments, disputes before the contract began (pre-contractual events). Typical waiting period: three months for some modules. A deductible often applies (for example 150 to 500 euros).

Is it worth it?

It depends on the risk. For drivers and tenants it often makes sense, for others less. With small amounts in dispute legal cover is anyway a cost risk for the insurer, and lawyers’ fees are often lower than expected. A free initial consultation (consumer advice, union, tenants’ association, lawyer advice for a small fee) sometimes replaces the insurance. Legal-advice aid and legal aid exist for low incomes.

Comparing and taking out

Compare benefits (value-in-dispute limits, deductible, free choice of lawyer, mediation), not just the price. Check the notice period. Take it out beforehand: no insurer pays for a dispute already under way. Questions? Stiftung Warentest and consumer advice centres compare independently.

See also: Liability and key insurance, Social insurance