Why Legal Insurance Is Important for Families

Only half of the households in Germany are covered by legal insurance. But according to lawyer and mediator Dr. Holger-C. Rohne, it is in the top three most important kinds of insurance for families. Holger is based in Heidelberg and specialises in employment law and criminal law. We asked him what makes legal insurance so important for families in particular.

Holger, who can benefit from having legal insurance?

Legal insurance protects the interests of the insured person in the case of a legal dispute and covers the resulting costs. However, more than half the households in Germany do not have this cover. This means they have to pay for the legal fees and court costs themselves – or they don’t try to assert their legal rights at all because it is too expensive. A lawsuit against unfair dismissal or disputes regarding a rented or owned home can easily cost several thousand euros. So legal insurance is useful for anyone who cannot afford to pay such large sums of money. That applies not only to single people and couples, but also to families – especially if there is only one main earner.

How commonly do families face legal disputes?

Here you need to differentiate between disputes among family members and disputes in a family situation. Disputes within a family are usually related to issues like divorce or inheritance. In these cases, it’s a little complicated to say what can be covered and what can’t be covered. But there are special insurance tariffs that can cover situations like these. What’s much more relevant for our everyday lives, however, are the typical disputes that can happen to every one of us. These include private legal cases, traffic offences, fines, rent disputes, neighbourhood disputes, claims for damages and, importantly, everything related to employment law. All of these areas are typically covered by legal insurance. In my opinion, it is highly recommended to find a tariff that covers negotiations about work termination agreements even if there is no immediate threat of termination. Criminal law can also be covered partially or completely. The best option here is to find a tariff that pays for agreed legal fees up to a particular amount.

You say that legal insurance is one of the most important types of insurance for families, alongside health insurance and personal liability. Why is that?

Because without legal insurance, most people hesitate to stand up for their rights. I frequently see this in practice: people who are actually in the right, but who shy away from taking legal action because of financial considerations. The same applies to people who do not want to take legal action but prefer to settle the matter amicably through a mediation process. These costs are not insignificant either, but they can be covered by legal insurance.

And why is it important for families in particular?

The larger the family, the more likely it is that a family member will face a legal conflict at some point. In my experience, legal insurance is very important when it comes to employment relationships. Because there is a high probability that you will lose your job at least once in your life. That’s when it can quickly get very expensive. You should actually appeal against the vast majority of dismissals. Even if you are dismissed during the probation period or you work in a small company, it’s important to take a closer look and, if necessary, take legal action. Otherwise you risk being suspended from unemployment benefits for a certain amount of time. This is the case if you were terminated due to accusations related to your behaviour or if you are protected against dismissal (e.g. if you are pregnant or have a disability). What many people do not know is that, for employment law cases, both parties have to pay for the costs themselves up until the first instance (i.e. the first court hearing). Without insurance, many people are hesitant to take this step. And if someone does not defend themselves against an unfair dismissal because they don’t have enough money and are not eligible for legal aid, then you can see a clear imbalance.

Can you give us an example?

Sure. If a pregnant woman is dismissed by her employer, the employer will lose the legal battle. However, the employee still needs to pay her lawyer’s fees. If her employer fires her again after this incident, the employee will have to pay these costs again. The same applies if the employer keeps thinking up reasons to fire somebody from the company. Legal insurance helps protect employees against employers acting like this.

Are there any legal formalities that should be considered before the birth of a child?

No. It’s usually enough to inform the insurance company about the new family member.

How long are children insured for?

Underage children can always be insured. Unmarried children of legal age are often insured until they turn 25, as long as they are not living in a life partnership. Children are no longer insured once they take up a permanent professional activity and receive an income for it.

Can you take legal action to obtain a place at university or college?

If you or your child are denied a place at a university or college, it is possible to take legal action. The aim is to check whether the allocation of study places was performed correctly or whether it would be possible for the university to offer additional places. This can save you having to wait to get the most sought-after university places. It’s important to speak to a lawyer specialising in this area as soon as possible. They will take a look at the files and examine the individual case.

Can legal insurance help you obtain a place at university or college?

Not all legal insurance policies cover this kind of case and depending on the policy there could be long waiting times. If the policy does cover legal action against universities, then it will usually pay for the legal costs of proceedings, minus the excess. However, lawyer’s fees can be much higher than usual because the process can be very complicated depending on the university. In this respect, legal insurance at least gives you some basic protection to make sure you don’t have to pay the full fees yourself.

Are there other formalities that you need to consider if the parents are not married?

An unmarried partner who lives in the same household as the policyholder can be insured on the same policy.

What costs does legal insurance cover?

As a rule, legal insurance covers all legal fees and court costs, but only in accordance with the legal remuneration schedule for lawyers. It is important to note that legal insurance does not usually cover family-related disputes like divorce or inheritance.