Motorcycle Insurance Glossary - legal expenses insurance
As well as being provided on a stand-alone basis, legal expenses insurance is commonly included in motorcycle insurance policies and increasingly in household policies. When it is sold as part of another policy rather than as a stand-alone product, it is often presented as a free (or low cost) addition.
Typically, cover is provided for the legal expenses that the policyholder may incur in most personal injury disputes, as well as for any award of the other party’s legal costs. Normally, there is a requirement that if a policyholder makes a claim for legal expenses, any legal action for which the expenses are incurred must have a reasonable prospect of success. The policyholder is also usually required to accept any reasonable offer of settlement.
When a policyholder puts in a claim under a policy of this type, most insurers will assess the dispute in-house (or perhaps with the assistance of one of their panel of solicitors), and will then determine whether there is an arguable case. If the insurer concludes that the case has little prospect of success, it may simply notify the policyholder that it is not prepared to accept the claim.
Where the case appears more complex, or seems to have a good chance of succeeding, insurers usually appoint one of their panel of solicitors to consider the matter. These panels are set up by insurers to deal with cases on commercial terms that are agreed in advance. The terms may be agreed on a ‘no fee’ basis (where the solicitors expect to cover their costs through the costs awarded against other parties, if their client is successful) or on the basis of a set fee per case. Only in exceptional circumstances will the insurer appoint a solicitor not on its panel.
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