Remember the adage: it never matters until it matters and then it matters, and boy does it matter. And cost.
It is for this very reason that legal insurance
is seen as just another grudge purchase when we would really rather spend the money on a new pair of shoes. Until such time that we need a lawyer and then, unless those shoes happen to be magical ruby slippers, we realise legal insurance may have been the better option.
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In simplest terms, legal insurance is helpful for anyone to assist with fitting unexpected lawyer’s fees into your tight budget. Most legal protection policies allow you to use any lawyer, according to a tariff schedule but it is worth checking that you do not need to be limited to a certain subset of lawyers before taking out this policy.
Interested in legal cover? Let the Guru help you find the best plan to suit your needs.
What do lawyers cost?
Consider the fees charged by a standard law firm in South Africa, depending on the lawyer's position:
- Senior partner: nearly R6000 an hour
- Director: over R5000 an hour
- Senior associate: over R4000 an hour
- Associate: over R3000 an hour
- Candidate attorney: R1500 an hour
What do legal insurance premiums cost?
The premiums are normally dependent on the level of cover you require, where the cover limit is 1000 times the monthly premium per claim. For example:
- R75 a month for up to R75 000 cover per matter
- R200 a month for up to R200 000 cover per matter
Are there any hidden costs?
Yes and no. Some insurers only charge a monthly premium, where for others you will need to pay three times your monthly premium per matter, except for telephonic consultations. As far as telephonic advice goes, this is normally available 24 hours a day as an additional benefit. Before taking out the policy, you simply need to ask, are there any hidden costs? Insurance companies are obliged to be clear about the costs up front.
In which situations will legal cover help me?
Also consider some of the almost everyday situation that may require the help of a lawyer:
- Unfair dismissal and CCMA labour union hearings
- Wrongly accused of a crime, such as stealing at work
- Assaulted in the pub during a disagreement
- Reputation is ruined at work because someone spreads harmful rumours
- A loan to a distant family member that is not returned
- A plumber has not fulfilled his promises and you have already paid him
- Lodging a claim with the Road Accident Fund
What is not usually covered?
- Offenses related to violent crimes are excluded by some insurers, while others, such as Hollard, offer judgement-free cover across the board
- Legal proceedings related to military service is excluded
- Legal matters of a commercial (non-private) nature are excluded
- Fees for international lawyers are excluded
- Three month waiting period
- Existing matters
Are there free extras?
Yes, many of the legal policies in South Africa offer 6 or 12 month retrenchment cover where they will pay your premiums for the period of retrenchment. Some also offer accidental death benefits.
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