Key takeaways

• Contact your legal insurance provider immediately when you face a legal problem.
• Confirmation of coverage is a written letter from the legal insurance company confirming the legal expenses coverage.
• Legal insurance company offers free legal advice on the phone. You can use it to clarify your questions.
• The legal insurance provider assesses the case before accepting to cover the legal costs.

This is how you do it

• Get the confirmation of coverage before you hire a lawyer or pursue a legal dispute.
• Your legal insurance company recommends the lawyer. But it’s up to you who to hire.
• You have three ways to object to the legal insurance company’s decision.
  • Go to the insurance ombudsman
  • Arbitration report (Schiedsgutachten)
  • Casting vote (Stichentscheid)
• Get legal protection insurance if you don’t have one. You can compare the legal insurance offers on Check24* or Verivox*. If you want a service in English, check Getsafe* legal insurance and Feather*.

Table of Contents

What can you do when faced with a legal dispute in Germany?

No one likes disputes. But if you find yourself in one, you’ll need support from a lawyer.

If you do not have legal insurance, you’ll bear the lawyer’s fees and court costs yourself. On the other hand, your legal insurance provider covers the legal costs if you have a legal insurance policy.

Depending on the dispute, ways other than hiring a lawyer exist to assert your rights in Germany. Here are a few ways to get legal support without hiring a lawyer.

• Get help from the tenant’s association if you have disputes with the landlord.
• The landlord’s association can support you with disputes with the tenant.
• Insurance ombudsman helps customers who have issues with their insurance providers.
• You can get help from the Federal Telecommunication Ministry if you have slow internet problems.
• Contact the consumer advice center to file a complaint against a service provider.

Similarly, there are other avenues to get help depending on the problem. So, the first step is to search Google for someone who can support you with the dispute.

If you don’t find anyone or the ones you found can’t help, the only option is to hire a lawyer. Yes, lawyers are expensive in Germany.

It’s the reason why having legal protection insurance is so important.

You can compare the legal insurance offers on Check24* or Verivox*. If you want a service in English, check Getsafe* legal insurance and Feather*.

Steps to get legal insurance benefits in the event of a legal dispute

• Get free legal advice on the phone
• Contact your legal insurance provider
• Get a confirmation of coverage (Deckungszusage in German)
• Find a lawyer
• Mediation

Free legal advice on the phone

Many times, you have questions about the situation you are in. You want to know your rights and what you can do to assert them.

Legal advice on the phone is the way to go. Many legal insurance companies offer free legal advice to their members on the phone.

Moreover, the insurer doesn’t consider the legal consultation on the phone a claim relevant to contract termination. 

Contact your legal insurance provider

If you decide to pursue the dispute or find yourself in one, you should contact your legal insurance company immediately. You can contact the insurer by telephone, online on the insurance website, or by sending a letter via email or post.

You must inform your legal insurance provider about the dispute. Explain the event in as much detail as you can. Also, hand over any possible evidence and documents. 

NOTE: Never lie or give false information to your legal insurance provider. Your insurer may reject your claim and cancel your membership.

Get a confirmation of coverage (Deckungszusage)

Next, you must get a confirmation of coverage from the legal insurer. Confirmation of coverage is the written confirmation from the legal insurance provider to cover the legal costs.

The legal insurance provider can also refuse to cover the costs of a legal dispute. So, to avoid being stuck with high lawyers and court fees, you should get the confirmation of coverage first.

More about it later in this guide.

Find a lawyer

If your legal insurance contract includes a free choice of lawyer (Freie Anwaltswahl), you can hire any lawyer you wish. Otherwise, you have to go with the lawyer your insurance provider recommends.

Here are some advantages of going with the lawyer suggested by the insurer.

• The legal insurance company must have worked with the lawyer and have positive feedback. The legal insurance provider also wants to win the case to avoid bearing legal costs.
• The lawyer knows how to claim legal costs from the insurance company. Hence, it’ll save you some headaches when claiming legal expenses.

But in the end, it’s your choice. You should feel comfortable with the lawyer.

Lastly, check how the lawyer is charging you. Is it per the statutory fee schedule or individual fee agreement?

Individual fee arrangements are usually more expensive than the statutory fee schedule.

Mediation

Now, it’s a matter of checking whether the case can be resolved through 

• mediation,
• an out-of-court settlement,
• or the legal case going to court.

What does the legal protection insurance check?

The legal insurance company checks the five criteria below.

1. Is the area of ​​law in question covered by insurance?
2. Does your legal dispute start before or during the waiting period?
3. Are there any special risk exclusions in the contract that apply to your case?
4. What are the chances of success?
5. Is it worth pursuing the legal case monetarily, or do you just want to prove yourself right?

After assessing the situation, the legal insurance company will either confirm or refuse coverage. Let’s see what the insurer checks in each criterion.

#1 Is the area of ​​law in question covered by insurance?

In Germany, there are different types of legal insurance: Tenant legal insurance, employment legal insurance, landlord legal insurance, etc.

The legal insurance provider will cover the legal costs of disputes under the insured areas. Thus, the legal dispute for which you are requesting coverage must be covered by your insurance policy.

#2 Does your legal dispute start before or during the waiting period?

Legal insurance contracts in Germany usually have a 3 to 6-month waiting period. The insurer doesn’t cover the legal costs of the disputes that arise during or before the waiting period.

You must differentiate between “when” the issue arose and “when” you took it to court. The legal insurance company decides based on when the issue arose and not when the dispute went to court.

So, the insurer will not cover the costs if the issue begins before or during the waiting period. Even if you took the dispute to court after the waiting period ends.

The point at which a legal dispute begins is subjective. Moreover, it’s the most common reason for conflict between the insurer and the customer.

#3 Are there any special risk exclusions in the contract that apply to your case?

The legal insurance company doesn’t cover certain legal issues. They add these issues to the contract as special risk exclusions.

Here are some of the risk exclusions you can find in a legal insurance contract.

• Disputes in the area of ​​construction and construction financing. 
• Copyright, trademark, and patent law.
• Disputes in connection with self-employment, freelance, or commercial activities. You must get a separate commercial legal protection insurance policy to cover it.

#4 What are the chances of success?

The legal insurance provider evaluates the case based on the evidence and documents. If the insurer finds a slim chance of winning, they refuse to cover the case’s legal costs.

The legal insurance company must provide reasons for rejecting the claim. And you have the right to object to the legal insurance provider’s decision. 

You can get help from the insurance ombudsman to file a complaint against your insurer. 

#5 Is it worth pursuing the legal case monetary?

Legal insurance companies want to avoid cases where the value in dispute is small. It’s because the lawyers and courts use the value in dispute to calculate legal fees.

Thus, it’s not worth the lawyer’s time to invest hours for a value in dispute of a couple of hundred euros. 

However, the reason that the value in dispute is small is not enough to refuse coverage (Stuttgart District Court, no. 13 C 4703/02).

Confirmation of coverage (Deckungszusage)

What is a confirmation of coverage (Deckungszusage)?

Confirmation of coverage (Deckungszusage) is a written letter from the legal insurance provider. In the letter, the company mentions whether it will cover the legal fees and court costs. 

The confirmation of coverage letter also mentions how much legal costs the insurer will cover. Hence, get it before you hire a lawyer.

How do you get confirmation of coverage?

There are two ways to get the coverage confirmation.

• You ask the legal insurance company to provide it
• Your lawyer gets it on your behalf, but the lawyer may charge you for it. The legal insurer doesn’t cover these costs.

Simply call the insurer’s hotline to explain the issue. Ask if they cover the dispute. If they do, request a confirmation of coverage.

Suppose the situation is complex. And you find it difficult to explain the issue yourself. In this case, ask your lawyer to contact the insurance company instead.

The lawyer can explain the situation better than you can, irrespective of how good your German is.

The legal insurance company cannot refuse to cover the costs later once they commit to the coverage. It doesn’t matter if you win or lose the legal case (Celle Higher Regional Court, no. 3 U 83/10 ). 

However, the insurer can refuse to cover costs later if they find out that you provided false information.

What to do if the legal protection insurer refuses?

You have three options if your legal protection insurance provider refuses the coverage.

Casting Vote (Stichentscheid)

You can call for a casting vote if the legal insurance company refuses the coverage. In the casting vote, your lawyer answers the following two questions.

• What are the prospects of success?
• Are the legal costs proportionate to the desired success?

The legal insurance company covers the lawyer’s fee for the casting vote. And the lawyer’s decision is binding for both sides. 

Moreover, the insurance company cannot add further reasons for rejection after the lawyer’s decision (Hamm Higher Regional Court,  Ref. I-20 U 92/10).

Arbitration report (Schiedsgutachten)

An arbitration report is an expert report that is binding on both the insurer and you. The bar association appoints an expert to create the report.

The arbitration expert is an independent, impartial, and technically competent individual. The expert assesses the situation based on the facts and makes the decision.

The insurance company covers the arbitration costs if the decision is in your favor. However, you must cover the costs if you lose.

Insurance Ombudsman (Ver­si­che­rungs­om­buds­mann)

The third option is to contact the Insurance Ombudsman. Support from the insurance ombudsman is free for consumers. 

Moreover, if the decision is not in your favor, you can still try the above-mentioned options.

The ombudsman’s decision is binding for the insurer up to a complaint value of 10,000 euros.

References

• https://www.check24.de/rechtsschutzversicherung/fragen/schadensfall/
• https://anwaltsblatt.anwaltverein.de/de/themen/kanzlei-praxis/rechtsschutzversicherung-wann-tritt-versicherungsfall-ein
• https://www.transparent-beraten.de/rechtsschutzversicherung/rechtsschutzversicherung-typische-schadensfaelle/
• https://www.finanztip.de/rechtsschutzversicherung/rechtsschutzversicherung-deckungszusage/