May 21, 2011

How Legal Expenses Are Handled By Car Insurance Coverage

It is important to check whether the car insurance policy covers legal expenses as well. It is not advisable to presume that the party at fault or the policy shall pay for all car insurance legal expenses. Not all comprehensive insurance policies include coverage for this expenditure. A car owner who does not have provision or protection for legal expenses will have to pay for the same out of his or her pocket.

Why are legal expenses incurred? What legal expenses are involved when filing a claim after a collision? Minimum expenses will be incurred when the party at fault admits to the same and agrees to pay the claim out of his or her insurance protection. However, the party at fault may contest liability. A dispute may happen regarding cost of repairs, medical treatment or third party liability. The party not at fault will require full fledged legal representation to settle the claim.

Cost of formal legal notice, of collecting evidence, of preparation of paperwork, of seeking testimonies from witnesses, of obtaining reports from public authorities, of keeping track of various medical expenses - all this will result in a huge cash outflow even before the terms of settlement are finalized.

Ideally, the party at fault should bear all costs and car insurance legal expenses. However, this is at the discretion of the court. The court may order payment of a specific amount as costs irrespective of the actual costs. Or, the court may pardon the costs leaving each party to bear the same.

Going in for a specific legal expense cover by paying a specific amount over and above the premium well help the car owner enjoy extra protection. The amount paid will go waste if no legal expenses incurred. However, the policy will pay for all legal expenses incurred up to the limits specified in the terms and conditions if one opts for this optional protection.

In today's world where individuals at fault employ manipulative legal experts to avoid liability, one may have no option but to go in for expensive legal assistance to secure one's right to compensation after the accident.

Ignoring legal expense coverage may cause a huge loss even after the claim is settled in favor of the party not at fault. The costs will have to be born before compensation will be received. This can place a huge burden on finances.

It is advisable to consider this aspect when comparing different insurance policies. Access to inexpensive legal representation means one has the option of skipping this rider. Those who do not enjoy such a facility will have no option but to consider the cost of legal expenses when finalizing the insurance policy.