Introducing Legal Insurance In Belgium: What You Need To Know
Legal insurance is something you only think about after a bad experience with the legal system. Due to an increased delay in the delivery of my turnkey apartment, I realized that even with all the research I did before signing the sales agreement, I could still end up in a legal battle. While it’s now too late, I wanted to protect myself better in the future, so I bought legal insurance.
My legal insurance won’t cover the delayed construction since I already knew about the delay before I got the insurance. But what about future issues? Say another home that I might renovate, or if I, my wife, or my daughter gets into trouble that the family insurance legal coverage wouldn’t cover?
What is legal insurance: what does it mean?
First, I have to clarify what legal insurance means. Overall, this is the same everywhere:
Legal insurance protects your rights and all legal costs linked to it when something happens where you suffered or caused damage.
Cases, where it can be helpful are, for example:
- Unfairly fired or discrimination at work: If you are pregnant and your employer fires you.
- Injury due to an accident by your own or someone else’s fault: someone bikes into you while biking but says you hit them.
- Arguments over defective goods or services: You received a faulty product, but the manufacturer says it’s due to incorrect use.
- Discussions with the tax authority overfilled taxes: You provided proof of income, but the taxman says it’s wrong/incomplete/etc.
Two major insurance types in Belgium
To know when you can call upon legal aid and for what, you need to know there are two types of legal insurance in Belgium:
- Supplementary protection: Your legal assistance is an additional, usually optional, cover to another insurance, the most prominent being:
- Car
- Fire
- Family
Legal aid is then accessible in case of a dispute related to the primary insurance. For example, you can claim legal aid from a car insurance company because of a speeding ticket. Or in case of fire to your home caused by faulty electrical wiring and the electrician doesn’t agree.
- As standalone insurance: The legal insurance is signed as standalone insurance. It covers almost everything with only a limited amount of options, such as driving a car owned by a third party (e.g., a rental car). You are not dependent on the primary insurance (auto, fire, family, etc.).
Standalone legal insurance isn’t necessarily more extensive than supplementary. The scope is broader, but the limits of a specific section aren’t necessarily higher than if you were to take out supplemental insurance for that section. It’s impossible to know which one is better so you must read the conditions in advance. Most standalone insurances usually have a more ‘premium’ coverage with higher limits and shorter waiting times.
What does legal insurance (not) cover?
For the two different types of legal aid insurance, you can always contact your legal insurer to obtain information about your rights without any obligation, even if there is not yet a potential dispute. On the other hand, as the insured, you are also responsible for providing all information about a (possible) conflict.
Both types cover you as a private individual, so not a business and everyone living under the same roof as you. This is where most similarities end; some insurers cover hired household help, others don’t. ARAG is such an example. ARAG also splits standalone into ‘private’ and ‘mobility’ while other insurance, such as AG Insurance, don’t but have a bit more stringent conditions.
It speaks for itself that the actual coverage will be different based on the type of insurance you have and the formulas insurers provide.
Regardless of the type, it doesn’t cover certain costs
Legal aid does not cover all the costs involved in a dispute. Here are some of the cases in which legal assistance does not intervene:
- Legal aid does not compensate you for the damage you have suffered. You can normally fall back on your other insurances, such as car insurance, fire insurance, and family insurance.
- Insurance will not pay a possible fine if you are held liable. So your defense is paid regardless of the sentence, but if the sentence has a fine, you pay for it yourself.
- If it turns out that when you took out the policy, you were already aware of crucial information that would (at a later stage) give rise to a claim against your insurance company, then your insurer will not intervene.
- Usually, there is no deductible, but they often set a minimum amount before legal aid can be effectively activated (intervention threshold). These can range from roughly €50 to as high as €250.
- Be aware of the restrictions that exist. For example, attorney fees are usually capped. If you do not know this, you can suddenly face unpleasant surprises.
- Divorce and construction disputes predominantly have their terms. Usually, the first divorce is covered, but a second one isn’t.
Pros and cons of legal insurance
Like most things in life, there are pros and cons to legal insurance.
Honestly, the biggest ones are the same as any other insurance. You pay for something you hope you’ll never have to use. At the same time, it provides peace of mind.
With legal insurance, it’s easier to speak out against wrongdoings against you or your loved ones.
Other things worth noting
- Regardless of the policy restrictions, European law dictates that a person has the right to choose their own lawyer (see Insurance Directive 2009/108/EEC).
- An insurer will first try to mediate between parties before looking to take further legal action.
- There are waiting periods (as you can see with my insurance). There are three types:
- 3 months in case of general contracts and rental agreement
- 12 months for anything related to wills, administrative, fiscal or inheritance
- 12-24 months when it’s about personal or family law
- To cancel your insurance you must notify your insurer at least 3 months before the annual start date. If you don’t, your contract automatically renews with one year.
The real cost of legal insurance in Belgium
When it comes to the price of legal insurance, there isn’t a clear-cut table or answer for this as it depends on a multitude of factors impossible to cover in this post. They also change frequently so this with go out of date very fast.
A rough ballpark figure is somewhere around €50 to €100/y for supplementary insurance, and €200 to €400/y for standalone legal insurance.
My choice and its cost: Providis Global Legal insurance – €324/y (incl. discount)
As a reference, my Providis Global Legal insurance costs €324/y for:
- Excellence: doubling of the above-mentioned maximum interventions and halving waiting periods and threshold amounts.
- Driving a third party’s vehicle: as a company car driver or when driving a rental car, I’m covered for claiming damages on a non-contractual basis, Salduz intervention, criminal defense, bail, administrative fines, civil defense in the event of a conflict of interest, contractual dispute with the insurer, contractual dispute with the owner, lessor or lessee, advance payment of damages and third-party insolvency and this worldwide.
Important! Tax-deductible as of 2019 for (some) legal insurance in Belgium
Since 2019 you can enjoy a tax deduction of 40% for insurance premiums up to €310. This insurance must cover at least €13,000 in civil cases, €13,500 in criminal cases, and EUR 6,750 in construction disputes.
The optional legal assistance cover for contractual and other disputes under our family insurance now also provides legal assistance in the event of (a first) divorce and for construction disputes. That’s particularly useful as lawyers, and the courts can end up costing you a lot of money.
For the assessment years 2020 and 2021 (income for 2019/2020), up to €310 qualify for tax relief. The maximum tax break is, therefore, 310 euros x 40% = 124 euros.
First use
Coming up on my ninth month of having it, there hasn’t been any reason to use it, until February 2022. One of my credit cards had an unusual high direct debit transfer, over €4,000!
Alarm bells went off inside my head, and at the speed of light, I searched for the rental documents I received on paper and digitally. Upon closer inspection, I noticed that the second rental I booked during our recent trip to South America withdrew $2000 at the start of my rental period (3 Jan. – 14 Jan. 2022). I discovered this withdrawal was the warranty I approved which was supposed to be blocked, not withdrawn.
Not on my watch! I called my bank and asked for a refund, but they weren’t inclined to do much since it was an authorized transaction and told me to check with the rental company. Disgruntled but understanding, I contacted Sixt, the rental company, to seek redress for the cause of this strange collection that was supposed to be a blocked amount.
A deterrent effect
It worked, as my money was immediately refunded without so much as a rebuttal. Now, it’s very likely they would have refunded it either way, but I’d like to believe the legal coverage helped me be more straightforward.
It remains to be seen how much a deterrent effect it really has for real disputes and how fast or good the assistance is but while I’m not afraid of legal struggles thanks to the insurance, I hope I don’t have to use it any time soon.
Conclusion
So there you have it, legal insurance in Belgium in a nutshell.
Would I recommend you get standalone legal insurance? Yes, but! Only if you see chances of being at odds with others as relatively high. Most of us most likely won’t ever see the inside of a courthouse. Unfortunately, it only takes but one stroke of bad luck to stand in front of a judge. Be it due to a dent you caused in someone else’s car, or because a contractor isn’t holding his part of a deal. At that time you wish you had it.
As far as complimentary legal aid insurance goes, the small extra costs make it a good option to have for your family insurance and/or fire insurance.
Providis Global Legal insurance with the Excellence package and coverage of party vehicles is my choice because of its wide coverage while still having decent limits and a shortened grace period.