What is motor legal protection

Take a look at our quick informative video which explains what motor legal protection does and how you can get the benefits of motor legal protection free for life by becoming a member of Free Motor Legal

 

Are you ready for those summer holiday car journeys? Our top 10 tips

Are you ready for those summer holiday car journeys? Our top 10 tips

  1. Plan Your Journey

    Avoid stress whilst you’re on the road and plan ahead. It is well worth planning a route to take across the country, planning roughly how much you can spend each day and planning activities that you can stop and do along the way.

  2. Check Your Car’s Fluids

    To keep your car in tip top condition and avoid the risks of breakdowns, you should make sure the following fluids are kept topped up: including engine oil, windscreen washer fluid, engine coolant and of course, fuel.

  3. Check Your Tyres

    Take a few moments to check the tread and pressure of your car tyres. This may save you from breaking down or worse, a crash. Check that you have a road worthy spare wheel in your car in case of an emergency and maybe a can of tyre foam?

  4. Prepare Car Games

    Preparing a range of car games that the children can play may delay or at best, prevent the dreaded question asked by every child on a car journey, ‘Are we there yet?’. Grrrrrrrr!

  5.  An Emergency Kit

    Mo matter how old or new your car is, it could break down. An emergency kit should consist of a breakdown triangle, a blanket, a torch, high visibility jackets (legal requirement in France), a mobile phone, a map, and most importantly breakdown cover details. If you break down put on the hazard warning lights, get out of the car on the passenger side and move away from the vehicle.

  6. Pack The Car Well

    If you pack the car in a rush you have a tendency to miss things, and to forget where everything is in the car. Take your time, put things in the glove box that you will need on the journey. Make sure you can easily reach things like CD’s, tissues, snacks, map etc. Everything else should be packed in the order you will need them.

  7. Stop For A Picnic

    Who says that your holiday has to start when you reach your destination? Why not start it on your journey and stop for a picnic along the way? Take a few snacks, sandwiches, crisps, drinks and fruit and find a nice spot to stop and have a picnic.

  8. Plan A Scenic Route?

    Rather than just traveling along the boring motorways, why not plan a scenic route for your journey? Advantages of taking a scenic route to your destination include, avoiding long holiday tailbacks, stopping to stretch your legs more often, and discovering quaint little villages and beautiful scenery along the way

  9. Take Anti Sickness Remedies

    There is nothing worse than having poorly children in the back of the car. As well as over the counter anti sickness tablets you can use acupressure bracelets which have a small plastic button on the inside which put gentle pressure on acupuncture points. One final remedy would be to try ginger snap biscuits, as ginger can be a natural remedy to nausea.


  10. Have you got your Free Motor Legal membership & accident survival checklist?

    If the worst happens and you have a bump that was not your fault, calling our 24/7 claims line on 0800 144 44 88 could have you back on the road without needing to claim from your own insurance policy and avoid paying your excess.

Motor legal protection – the conversation nobody is yet having ahead of the Civil Liability Bill

The government shows no signs in halting the progression of the Civil Liability Bill, with very few amendments taking place as it progresses through the parliamentary channels. Plans remain to have the blocks in place for April 2019.

This will give rise to the proposed tariff based system for whiplash type soft tissue injuries as well as the increase in the small claims limit to £5000.00 for general damages on road accident claims.

Whether the public at large will end up applauding the outcome will remain to be seen. Those opposing the reforms remain dubious as to the level of savings (if any) which will trickle down to the consumer with the promise of reduced premiums arising from the reforms by the insurer lobby. Savings could be as low as £16 a year (30p/week)

The application of a £5000 small claims limit and tariff based damages system will capture the vast bulk of personal injury claims which arise from road traffic collisions.

So far, nobody appears to have voiced opinion as to how the legal expenses insurance marketplace will operate in such an environment and Lee Jones, managing director of Free Motor Legal Ltd, gives a background of his experiences of how the motor legal protection marketplace currently works and raises  questions of how will it may operate under the proposed new regime.

First of all, let us all be honest. Motor Legal Protection (MLP)/ Legal Expenses Insurance (LEI) has for some time been a product with shady underpinnings in how it was sold to consumers and then how the product is actually operated when a claim is notified.

Years of abuse in how it was sold as a default product needing the consumer to opt out, almost akin to PPI, was corrected in 2015 by the FCA. Customers now needing to opt in rather than it appearing automatically. Take up remains high due to a “better safe than sorry” approach, rather than an understanding of what the product is for and what it does.

An attempt by the FCA following a thematic review into the sale of Add-ons in 2015 wished to lift the veil, with a suggestion that claims ratios and payout rates be published to help demonstrate value to consumers was quickly and successfully stifled by the ABI, I wonder why?

The underwriting cost of the product is incredibly low compared to the retail price. It is not unusual to see unit costs as low as £0.50p, yet retailed typically at around £30.00. This amounts to a mark up of 6000%. I have even seen tenders for major UK insurers whereby they want the underwriting costs for free (paid for by the credit hire companies and law firms appointed to their panel to do ULR and PI work).

Why are the underwriting costs so low? Because, in my experience, the underwriters of the policies seldom have to entertain paying any legal costs! It is not unheard of for “hold harmless” agreements to be entered into on the side by law firms, promising they will never seek an indemnity under the policy. This leaves the panel firms assuming all responsibility for any adverse costs and allows the underwriters to sleep easy in the knowledge they will not be troubled for payments against the policy. So they remain happy to take 50p per policy for issuing some documentation and doing little else.

It does not cause any real harm to the consumer, after all, they get referred to a law firm and don’t have to pay any costs, but what is actually going on behind the scenes is of dubious merit.

It was this modus operandi which gave me the lightbulb moment for Free Motor Legal, seeing that frankly it made little difference to the lawyer if there was LEI cover present or not. They knew they were never going to be able to rock up to the LEI provider and seek payment for costs and disbursements on a case they lost. So I was able to create a free alternative to the underwritten product which performs the same functions for motor claims in England, Scotland & Wales.

Motorists sign up for free membership and in the event they have a non-fault accident and have losses or damage to claim, they will be referred to a lawyer and will not have to pay any fees and there are no success fee deductions. Essentially a LEI model without any actual LEI in place. Clients also benefit from an uplift of 10% on general damages due to the CFA in place with the panel law firm. So they actually get a better general damages settlement than somebody represented under a Legal Expenses policy!

As cases are progressed by way of a no win no fee arrangement, the client has protection against costs under the Qualified One-Way Costs Shifting (QOCS).

The system of LEI polices being used as a claims capture mechanism has operated for years and has seen colossal income streams for insurers and brokers alike. They have earned healthy mark ups from the sale of the product and thereafter impressive levels of income from referral fees and later “marketing fees” for personal injury and credit hire claims captured. Some insurers and brokers have danced around the regulations introduced in 2012 when referral fees were banned by simply taking ownership or financial interests in law firms under “Alternative Business Structures”

Now all of this is about to change, bringing about several questions.

It is clear that LEI works by avoiding having to pay lawyers for their work. The “reasonable prospects of success” clause contained in every policy allows cases with dubious merit to be cast aside. This helps the lawyers to avoid taking on cases where they can see trouble or a significant risk of being left writing off fees and expenses. Again allowing the underwriters to dodge any possible costs liabilities down the line.

Non-injury cases such as uninsured loss recovery have always been loss-making territory for the panel lawyer. These cases, sometimes requiring the instruction of counsel for a small claims hearing at a cost to the lawyer, were subsidised by the fee generating PI claims. Put simply, the lawyers get paid on the cases they win (by the third party insurers) and they absorb the losses on the cases they don’t win or are unable to progress. This again is the model Free Motor Legal adopted.

So if we move to April 2019 and have 95% of personal injury claims falling within the small claims track, that will mean no costs pre-litigation like we currently see under the Low Value RTA Protocol  and meagre levels of any costs in litigated claims. So there will be no food on the table for lawyers in terms of fees.

Due to the proposed tariff of damages, which will see somebody with a 3 month period of injuries receiving less than somebody delayed at Gatwick for 4 hours, there will be minimal levels of success fees to  deduct from damages.

So a whole new territory will appear and this gives rise to several questions and concerns for consumers:

After April 2019, will a person who has paid for a legal expenses policy with say, £100k of legal costs covered expect to see a panel law firm appointed to deal with their 6 month whiplash claim that will then be worth less than £500?

Are LEI providers going to pay their panel lawyers to deal with such claims? I suspect not. If they do, I suspect the level of costs payable will be very small, causing such firms to restructure significantly.

Are they going to take all services in-house? Or will exclusion clauses arise in rewritten policy T&C’s to again avoid the risk of outlays for legal costs arising? I predict matters being retained in-house and panel firms largely disappearing.

Or will motorists, realising they are going to have to go it alone in the claims process, cease to buy Legal Expenses Insurance? Only time will tell, much depending on how educated the public are on such a matter. On past consideration, add-ons such as LEI are completely misunderstood and it is quite likely insurers may succeed in selling this product for many years to come, whilst having to provide less and less support.

The absence of any proper income steams from personal injury work will also stifle the ability to cover the costs of the non-injury work, such as basic uninsured loss recovery litigation.

Although the reforms carried under the Civil Liability Bill are not yet finalised and hopefully there will be some sensible debate within the House of Commons to realise that a lot of the objectives of the bill are already being met by the outcome of previous reforms whilst insurance company profits continue to soar, there has yet to be any soundbites from the insurance industry on how these products will work for consumers in the future and the legal services industry seems to have not yet offered any opinion yet.

What are your views?

Lee Jones is the managing director of Free Motor Legal Ltd.

Top 10 tips to save on your motor insurance costs

  • Get the right level of cover – Fully comp or Third Party?

It used to be that third party fire and theft cover was always cheaper, but in recent years insurers have been happy to provide lower premiums for fully comprehensive as customers with fully comp cover seem to be a better risk and less likely to claim. So get more for less by getting quotes for fully comprehensive cover as well as TPFT.

 

  • Don’t leave it until the last minute – you will end up paying more!

Searching around for a new deal or switching car insurance 2-3 weeks before your due date results in average savings of £280.00 according to price comparison site comparethemarket.com The closer to the date you need cover to start before seeking out quotes results in the comparison sites and insurers dishing out more expensive quotes. Make sure you get your quotes in early. Many sites and insurers will guarantee the quote for 30 days.

 

  • Make sure you do compare and switch – never just let a policy auto renew.

There is no reward for being a loyal customer, not with insurers anyway. As you are already experiencing, new customers get all the best deals. The insurers rely on snagging you as a new customer with an inviting deal and then hoping you are too lazy to shop around at renewal time, by which time the premium will have increased and you end up locked in for another year.

 

  • Add another experienced driver on to the policy as a named driver

Adding a parent or other experienced driver onto your policy as a named driver can often lower premiums substantially, especially for younger drivers.

 

  • Pay up front – instalments = interest charged on top of your premium

Although it is easy to say, considering motor insurance costs for some people can be a big ticket purchase, if you can afford to take the hit all at once, consider paying your full premium in one hit rather than monthly. When you opt to pay by instalments you often find that the instalments are financed by a separate financial agreement, where interest is added and this typically adds another £60 to the total cost of the average premium.

 

  • Do you need all the extras?

Trimming back on some of the more common place “add-ons” like excess protection, guaranteed courtesy car cover can reduce premiums substantially. Also a cause close to our hearts is the added motor legal protection cover. This is typically £30 a year per vehicle. So a household with several cars could be buying this additional cover several times over. A free alternative can be found for motorists in England, Scotland & Wales., saving £30 per vehicle a year.

  • Set your excess higher to reduce the premium

An excess is the amount you agree to contribute towards the cost of a claim you make. So by increasing your excess amount, you are going to cost your insurer less in the event of a claim, but don’t get carried away. If you set your excess very high, such as over £1000.00, you could find yourself not being able to afford to pay for repairs to your vehicle after a collision

 

  • Cashback deals

Price comparison sites and other introducers get commission payments from insurers when you take out cover through them. So instead try some of the sites like www.quidco.com and www.topcashback.co.uk to see what cashback deals you can get. Make you search for some quotes via the usual price comparison sites first so that you know what the typical premium before cashback is.

  • Job titles make a difference

As strange as it sounds, the title or terminology you use can make a difference. You have to be honest though. So no point saying you are the chief executive of a multi-national company if you really work as a part time cleaner. But examples can be calling yourself “kitchen staff” when you work as a chef. The lovely people at moneysavinexpert.com have developed a tool to suggest job title changes which may lower your premium.

  • Haggle!

Yep indeed, it costs nothing to ask for some discount and often there is some “wiggle room” to be had, resulting in a lower premium.

What is Motor Legal Protection?

For motorists in the UK this is usually a separate policy you buy in addition to your main motor insurance policy. Motor Legal Protection (MLP) is also known as Legal Expenses Insurance (LEI) and the policies are used to assist you in recovering uninsured losses and expenses following a motor vehicle collision that was not your fault.

What is the cost?

They usually retail at around £30.00 per annum and often are restricted to only being used in connection with the vehicle you have insured. Households with more than one vehicle will often find that they are buying this additional cover several times over.

What are the drawbacks?

The policies can have restrictions on who can use them, causing households to have to buy the cover for each vehicle in the household. For example, a husband has his car insured and the wife is named as a driver on that vehicle. But the wife has her own car insured in her name with the husband as a named driver. If the husband purchased motor legal protection with his car insurance policy and the wife did not with her car insurance, the wife could not use the husband’s motor legal protection cover if she had an accident in her own vehicle and needed to claim back losses and expenses.

What is Motor Legal Protection used for?

Although you have your motor vehicle insured, often on a fully comprehensive basis, if you are involved in a collision that was not your fault, or where liability is disputed, you will often still end up with some losses and expenses that need to be claimed back. These are known as “uninsured losses” as they are not covered or insured under your motor insurance policy. This can include your policy excess which you have to contribute towards repairs or other expenses not covered  by your motor insurance policy, such as lost earnings, damaged items of clothing, travel expenses, hire car charges or personal injury.

What if the accident was my fault?

If you are the party at fault for a collision, say you fail to notice the vehicle in front has stopped and you collide with the rear of that vehicle, causing damage to the other vehicle and injury to the occupants, this would be a fault claim. In this situation, the other motorist would pursue you for payment of losses and compensation arising from the collision. This is not a situation in which your motor legal protection would become involved as this would be known as a “third party claim”. This is where you would involve your actual motor insurers. Even if the other party had to take court proceedings against you, your legal protection cover does not get used. Your motor insurers would appoint their lawyers to defend or deal with the claim and any court proceedings.

What if blame is disputed?

A common scenario, either because the drivers both blame each other for the collision (rightly or wrongly) or where the other motorist is being a little creative with the truth. Most motor legal protection policies will contain a clause that requires you to have “reasonable prospects of success” for your claim before they will appoint lawyers to fight your case or assist generally. Usually this means that you have a better than 50% chance of succeeding with your claim. As to how this will unfold will generally depend on what evidence you have to support your allegations, such as a witness who backs up your story, or dash camera footage or images taken at the scene which  could help to disprove the story of the other driver. This is why it is important to gather as much information and evidence at the scene as possible, rather than just take the “sorry mate, all my fault” apology from the other driver at the scene as drivers can often have a change of heart and deny accepting liability or simply change their story.

In conclusion

Motor Legal Protection / Legal Expenses Insurance is an “add-on” policy which runs alongside your motor insurance policy and is there to be used when you need to recover money for losses and compensation after an accident that was not your fault and, providing you have “reasonable prospects of success”. It is not there to “lawyer up” when you are at fault and the other party comes after you for their losses and damages. That is what your motor insurance cover is for.

Are there alternatives?

There are a few alternative ways of gaining access to legal services after a non-fault collision without having to pay for a legal expenses policy.

  • Union Membership. If you are a member of a union, you will often find that included within your membership benefits is access to legal services. Usually this would allow the appointment of a lawyer of their choosing and should avoid you seeing any deductions taken from your compensation.
  • Free Motor Legal – freemotorlegal.co.uk are a UK based free alternative to paying for motor legal protection. Members join free of charge and the membership lasts for life, so there is no need to renew each year like you traditionally have to with motor legal protection/ legal expenses insurance. There are no deductions taken from any awarded compensation and there is no limit on the number of vehicles you can have as the person is the member and the membership is not tied to your motor insurer.
  • Use a no win- no fee lawyer. This would avoid you having to pay any annual premium for a motor legal protection policy and if you had a non-fault accident, you would simply approach a no win no fee lawyer or claims management company to appoint a lawyer for you. Whilst you will save £30 a year from your insurance costs, there are a couple of major drawbacks to this method. i) The lawyer will most likely deduct a 25% “success fee” from your compensation settlement under the terms of the no win no fee agreement. ii) They will not help you if all you need to claim back is a policy excess or some other incidental expenses. For a no win no fee lawyer or claims management company to be interested in helping you, they will want you to have suffered from personal injury as that is the only way they can make any fees and apply a success fee. Taking 25% from a £100 policy excess is not going to keep them in business, so they will only deal with uninsured losses if there is also an injury claim involved.