Legal Insurance Could be Overhauled
Changes Required to Help Consumer Awareness, According to Watchdog
It’s something that many people might not even consider when they take out car insurance, though it is often bundled in as part of the deal, but if watchdogs get their way legal expenses insurance will be overhauled, allowing great consumer awareness. Up to now, watchdogs have argued, many people in the country are unaware of what is covered if they need to make a claim on such a policy.
“Worryingly for a product that millions of us have, there seems to be widespread confusion over what customers are actually paying for,” said LolaBello, the legal services expert at Consumer Focus ( www.consumerfocus.org.uk). “If these insurance products are to play a more important role in providing affordable access to justice they must be truly fit for purpose.
Overall Consumer Focus highlights particular areas in which legal expenses insurance could be improved, with a better explanation of what is actually offered and with greater consistency as well. They also point out that it should be promoted better and offer better choice for customers. To do this they wish to see a clearer marketing strategy, with more information for customers, freedom of choice so that when a claim is made customers can choose their own solicitor and an independent appeals system, among other options.
Consumer Focus also refer to the recent proposals to overhaul the ‘no wins no fees’ services that the government has been putting forward. Such overhauls, ministers such Justice Secretary Ken Clarke say, will see a reduction in costs for those needing to pay for car insurance policies, with bogus claims removed and thus a reduction in premiums. Consumer Focus point out the reform of the service – in addition to the cuts in legal aids that amount to £350 million a year – will leave a gap that not even a legal insurance reform can fill.
“Eligibility for legal aid is dwindling and this has resulted in a lot of noise about legal expenses insurance stepping into the breach,” Bello continues. “Our research shows legal fees insurance could help some consumers but it cannot plug the gap that any legal aid cuts will leave behind.”
