Articles about solicitors and legal services

Motorists still wasting money on unnecessary insurance

Millions of motorists are still wasting money on unnecessary legal expenses insurance despite a campaign launched three years ago to alert people to the problem.

The insurance usually costs between £15 and £20 and is tagged on to motor policies to cover such things as personal injury claims. The Motor Accident Relief Society, the charity which began the campaign to highlight the issue, estimates that the needless insurance costs drivers £270m a year.

The charge is seen by many as a way for large insurance companies to earn more money out of the unwitting motorist.

In fact, the driver is really being subjected to a double blow. The first point is that he doesn’t need any legal expenses insurance. If he does ever need to make a personal injury claim he’ll find that most solicitors will handle it on a no win, no fee basis which doesn’t cost him anything.

The second problem is that when the motorist comes to make a claim using his legal expenses insurance, he will find his case is farmed out to a solicitor chosen by the insurance company.

What he may not realise is that the solicitor assigned to him may have had to pay a fee of about £600 or £700 to the insurance company for the privilege of taking on the case.

It means that the solicitor is already badly out of pocket before he even starts working on the claim. In those circumstances, he may well be tempted to cut a few corners to reduce his costs and so not provide the best service.

The system works very well for insurance companies because they get paid when they sell the insurance and then get paid again when they sell the case.

The only real loser is the motorist who ends up paying excessive fees for a poor service that he didn’t even need in the first place. He would be better off keeping his money and then if ever he needs to make a claim, approaching a solicitor who will deal with the case on a no win, no fee basis.

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