Comments on: is legal insurance a good idea or is it not worth the money?

Question: is legal insurance a good idea or is it not worth the money?

krautland — Fri, 18 Aug 2006 14:21:17 -0800

is legal insurance a good idea or is it not worth the money?

this is a question about legal insurance plans. you might have seen them around, aragdirect.com offers what they call comprehensive coverage, so does hyatt legal plans and a few others. but are they worth the $400 annually (or $35 per month)?

let's face it, we do live in a litigation happy country. I myself would be happy to retain council every time I felt wronged (I am especially thinking of all the cable and phone companies in this world) but retaining council involves considerable cost and effort, which is why I never do. I feel it's only a matter of time until someone swipes my photos off flickr or sues me because of something in my blog and I would like to be prepared to respond without having to come up with ten grand out of nowhere in no time. having just dealt with id-theft myself, the idea of having someone on standby is even more intriguing. but do these plans work or are they another empty promise?

By: Gordion Knott

Gordion Knott — Fri, 18 Aug 2006 14:56:39 -0800

Supposedly, standard insurance contracts will provide coverage for most litigational entanglements you can get into. For instance, your homeowner's policy, if you've got a house, might have coverage for lawsuits up to a certain amount. And you can get umbrella insurance attached to business and real estate insurance policies.

But $35 a month might cover you for other things, like libel or copywright based suits, that the other policies won't. Sounds like a good deal to me -- on the surface.

By: 10ch

10ch — Fri, 18 Aug 2006 14:58:52 -0800

I say bologna! And-I-Also-Say... Don't be part of the problem! (re: litigation happy country, yuck)

Most people justify these things with the "It's a free will!"argument. But for $35 a month, it's a bad deal even if you use that justification. And that's assuming that you (are able and remember to) cancel after the first year.

Also, in recent surfing, I've read that some of the larger providers of pre-paid legal services are being criticized for not offering as comprehensive coverage as they advertise. Buyer Beware.

By: junesix

junesix — Fri, 18 Aug 2006 16:51:26 -0800

I'm not sure what the standard definition of comprehensive coverage is but the covered benefits of these firms looks pretty weak (Hyatt Legal, ARAG) and doesn't cover a lot of the hypotheticals you mention in your post. The covered benefits largely comprise only the most basic of legal services: wills, deeds, documents, custody, etc. For these, you're better off hiring an attorney as needed. They also provide consultations but if you'll need more extensive representation, these plans don't seem to cover it.

Seems like a bum deal to me.. like those credit card protection fees that the credit card companies try to push on you.

By: ROTFL

ROTFL — Fri, 18 Aug 2006 18:08:13 -0800

I have legal insurance through my work -- it's about $15 a month, so it's cheaper than you cite. It came in very handy when we refinanced our house a couple times, and we also used it for a couple consultations on various non-life-and-death civil matters. We've saved a bundle, and we've been happy with the quality of lawyers. We just had a child and we're going to make a will; for that, we're going to use a lawyer recommended by a trusted, and canny, friend. But for the routine stuff, I've been happy with the insurance.

By: christinetheslp

christinetheslp — Fri, 18 Aug 2006 20:56:33 -0800

I thought about legal insurance when it was offered to me through work, but from what I heard it's like a bad HMO...lots of situations not covered, and others covered incompletely. It just wasn't worth it.

I don't have any concerns about copyright infringement or libel like you do, though, so maybe it's a better deal for you.

By: Chuckles

Chuckles — Sat, 19 Aug 2006 07:22:08 -0800

is legal insurance a good idea or is it not worth the money?

The answer is the same for all insurance. On average, it isn't worth it (depending on the definition of worth), otherwise the insurance company would be losing money. Insurance is a reverse lottery, with the buyers betting against themselves.

The lottery can actually be a good play.. The utility of money is highly non-linear - to a poor person, the value of $1 million is substantially more than the value of 1,000,000 x $1.

By: MarkAnd

MarkAnd — Sun, 20 Aug 2006 18:45:09 -0800

They're occasionally worth it as a voluntary benefit through your employer if you anticipate needing a will or other reasonably simple law need. I've usually seen them priced in the $15-$20/month range. $35 a month seems steep.