Legal protection insurance: important terms

Insurance companies use many technical terms, such as geographical scope of application and gross negligence. Comparis explains the main terms you are likely to encounter in the context of legal protection insurance.

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1.Cover
2.Insured fields of law
3.Insured benefits
4.Geographical scope of application
5.Exclusions
6.Waiting period
7.Contract term
8.Cancellation and period of notice

Cover

The following expenses are covered:

  • Lawyer's fees

  • Legal reports

  • Court fees

  • Reimbursement of the other party’s legal expenses

  • Bail (paid by way of an advance)

The following are not covered:

  • Fines

  • Compensation for damages

  • Costs to be borne by third parties or liability insurers

Insured fields of law

Personal and motor legal protection insurance cover the following fields of law:

  • Tort law

  • Criminal defence in case of negligent violation of statutory provisions

  • Insurance law (includes disputes with private insurance companies and social insurance companies, pension funds and health insurers)

  • Employment law (some exclusions)

  • Patient rights

  • Other contract law

  • Legal advice cover for certain fields of law

  • Criminal law in connection with failure to observe traffic regulations

  • Driving licence suspension

  • Vehicle contract law (purchase, rental, loan, leasing, repair orders)

Insured benefits

In the case of legal protection insurance, the insured benefits essentially include lawyers’ fees, cost of expert testimonies, court fees, advances for bail and reimbursement of the other party’s legal expenses. This means that in the event of defeat, the insurance company will also cover the legal and court costs of the other party.

Most insurance companies provide maximum cover of CHF 250,000 per case.

Lawyer’s fees

Legal expenses insurance covers the lawyer's fees incurred in connection with disputes in the insured fields of law. As a rule, the lawyer's invoice is sent directly to the insurance company once the costs have been approved. The sum insured is usually a maximum of 250,000 francs per claim.

However, lawyer’s fees are not covered as standard because not all insurers allow free choice of legal representative. If free choice of lawyer is important to you, you should pay particular attention to this point when choosing an insurance product.

Choice of lawyer

A dispute can soon lead to conflicts of interest if the insurer’s own lawyer is used. It is therefore worth choosing legal protection insurance that allows as free a choice of lawyer as possible. If the involvement of an external lawyer is required for the purposes of legal proceedings, some companies require the right to reject the proposed lawyer or to choose one from three. However, the validity of such clauses is controversial, because the Insurance Oversight Act states that insured persons may choose their own lawyer for legal proceedings that fall under the lawyers’ monopoly.

Once a lawyer has been selected, the legal protection insurer usually sends confirmation of cost approval to the appointed lawyer in the event of a dispute and then pays the lawyer's invoice directly.

Gross negligence

If the policyholder makes a claim arising from a serious violation of the general duty of care, the insurer may reduce the payout.

Compare legal protection insurance

Geographical scope of application

All legal protection insurance policies cover legal cases where the place of jurisdiction is Switzerland or the Principality of Liechtenstein at the very least.

Exclusions

No legal protection insurance covers the following legal cases or events:

Legal cases...

  • in the area of family and inheritance law are generally excluded, but some insurance products cover costs of up to 300 or 500 francs for a one-time consultation. Despite the lack of insurance cover, litigation may be free of charge in certain cases: people on very low incomes are usually entitled to free legal assistance and to free litigation.

  • to defend against claims for damages (personal liability insurance helps here)

  • in connection with self-employment

  • in connection with the acquisition and disposal of securities

  • in connection with the purchase, sale or pledging of property, as well as construction, conversion or demolition (insofar as an official permit is required)

  • in connection with tax law

  • relating to the law on foreign nationals

  • relating to church law

  • that concern laws governing companies, associations and foundations

  • arising from gambling and betting

  • for anyone involved in fights and brawls

  • in connection with war, unrest or strikes

  • against the legal protection insurer

  • associated with nuclear fission and fusion or non-ionizing radiation

  • in connection with unauthorized use of vehicles

  • in connection with driving without a valid driving licence

  • in connection with customs disputes

  • in connection with the commercial purchase or sale of vehicles

Other exclusions, such as those in employment law, vary from insurer to insurer.

Hopeless cases

The legal expenses insurer may refuse to accept or continue a legal case if it judges it to be hopeless. The insured person can then take whatever measures they deem useful or correct at their own expense. If the insured person achieves a more favourable result in this way, the legal expenses insurer will cover the cost in accordance with the terms of the contract. In the event of a disagreement with regard to the hopelessness of a case, the insured person can initiate arbitration proceedings.

Waiting period

Legal protection applies from the start of the contract, i.e. the triggering event must occur on or after this date and must be reported to the insurance company. However, certain insurers reserve the right to impose a waiting period of three months for certain fields of law. In particular, a three-month waiting period starting on the effective date of contract usually applies to disputes relating to contracts. Some insurers will impose a 3-month waiting period in certain other fields of law too. These vary from one insurer to another. During this time, the stated legal fields are not insured.

Contract term

The term of the contract (or contract duration) is specified in the insurance contract. The minimum contract term for all legal expenses insurance policies is 1 year. If the contract is not cancelled, the legal expenses insurance policy is automatically renewed for one year.

Agree on the shortest possible contract term. This will enable you to adjust the policy if the cover you require changes as well as give you the opportunity to switch to a better deal if available.

Cancellation and period of notice

You can cancel your insurance policy with effect from the end of the agreed contract term. However, your cancellation letter must usually be received by the insurance company 3 months before the contract ends, otherwise the policy will be tacitly renewed for 1 year.

Would you like to be reminded of the next cancellation deadline by e-mail? Take advantage of the Comparis cancellation reminder service.

You can also cancel if you make a claim, but only if the claim is covered. The policyholder may cancel within 14 days of being notified of the last payout.

Since this insurance is subject exclusively to Swiss law, the policy can also be cancelled if you move abroad, as the risk expires. In this case, you will need confirmation of your de-registration from the registration office of your Swiss place of residence.

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