Legal expenses insurance: what it covers and when it saves you a headache

Imagine your residents' association has been ignoring a leak that is ruining your ceiling for months. Or you bought something online and the retailer refuses to give you a refund. Or you've received a traffic fine that you clearly don't deserve. These are situations anyone living in Marbella could face, and in every one of them the question is the same: is it worth hiring a solicitor? That is precisely what legal expenses insurance is for: so that money is never the reason you fail to claim what is rightfully yours.

What is legal expenses insurance and what does it cover?

Legal expenses insurance is a type of cover that pays your legal costs when you find yourself in a dispute and need professional help to resolve it. Put simply: if you have a problem that requires a solicitor, the insurer covers the fees.

What does it typically include? Quite a bit more than most people realise:

• Legal advice by telephone or in person, so you know from the outset whether you have a valid case and what steps to take.
• Solicitor and barrister fees if the matter goes to court.
• Claims for damages against third parties who have caused you harm (financial, material, etc.).
• Defence in administrative proceedings, for example if you wish to appeal a traffic fine or a penalty notice.
• Mediation and arbitration, to try to resolve the dispute without going to court.

And all of this at a cost that, as we shall see, is often surprisingly low.

Everyday situations on the Costa del Sol where legal expenses insurance makes all the difference

This type of cover is not reserved for large companies or extreme circumstances. It is for the day-to-day situations that anyone on the Costa del Sol might encounter. Here are four very realistic examples:

A dispute with a neighbour. The flat above yours has a water leak that has been damaging your ceiling for months and there is no way of reaching an agreement. Your legal expenses insurance can pursue the claim on your behalf without you paying a penny in legal fees.

A problem with a tenancy agreement. The landlord is withholding your deposit without justification, or the tenant has left the property in a terrible state. These disputes are extremely common in Marbella, where the rental market is very active, and they are exactly the kind of situation this cover is designed for.

A claim against a trader or company. A renovation left half-finished, a faulty appliance that nobody will repair, a travel agency that failed to deliver what was promised. Your insurance gives you access to a professional who handles the claim on your behalf.

A fine you want to appeal. A poorly calibrated speed camera, a sign you couldn't see, a parking ticket that doesn't add up. If you believe the penalty is unjust, your legal expenses cover can fund the appeal.

Do you already have this cover without knowing it? You just might

Here is something many people discover too late: legal expenses insurance is often included as an additional benefit within other policies, particularly in home insurance and car insurance.

Many people have this cover and are simply unaware of it because they have never needed to use it. Before taking out a standalone policy, it is well worth checking the specific terms of what you already hold. At Segurmar, we can go through this with you in five minutes.

If your current policies do not include it — or if they do but with very limited cover — you also have the option of taking out a legal expenses insurance policy in its own right. These tend to be very affordable, often coming in at under €100 per year. It is one of those policies nobody values… until they need it.

Frequently asked questions about legal expenses insurance

Can I choose my own solicitor?

Yes: the law recognises your right to freely choose your own solicitor and court agent in any proceedings, and also where there is a conflict of interest with your own insurer — it does not depend on the company. What can vary from one policy to another is the amount available to cover those fees, so it is worth checking before you take out a policy. We cover it in detail in Can I choose my own lawyer?.

Does it cover disputes with the insurer itself?

This is a common limitation: as a general rule, a legal expenses policy does not cover claims against the very company that issues it. This is a key point to bear in mind, and one reason why it can sometimes be worth taking out this cover with a different insurer.

Is there a waiting period?

Yes, most policies include a waiting period (the time that must pass from the start of the policy before you can make use of the cover). This is typically between three and six months, though it varies by insurer. If you already have an ongoing dispute, you will not be able to claim for it retrospectively.

Do I already have it on my home or car insurance?

You may well do. Check the benefits included in your current policies. If you are unsure, the team at Segurmar will look into it for you with no obligation and explain exactly what you are and are not covered for.