Money Grouse: When the insurers won't cover your legal expenses

SIMON FULLALOVE, a marketing consultant, has been a customer of the Legal Protection Group, a firm of legal expenses insurers, for two years. He is now dismayed to find that the company will no longer continue to provide him with cover, since he is unlikely to be able to get this specialist form of insurance anywhere else.

In his two years with LPG, he has paid insurance premiums of about pounds 260. He has made three claims, however, which between them amounted to nearly pounds 2,000. But this, he feels, was simply a 'run of bad luck'; he does not expect to be making further claims. There are times in one's life, he believes, when one is more prone to litigation.

Last month he tried to argue this point when he wrote to LPG in an attempt to make it change its mind. In his letter to LPG, he said: 'Of course there are times when litigation is more likely - such as when we moved out of London 18 months ago, bought a derelict house and used local builders and surveyors of whom we had no previous knowledge.

'Both of our major claims relate to this episode. Now that we are back in familiar territory (in Twickenham), the work we have carried out on our current house has gone without a hitch - and we now look forward to a long and, I hope, litigation-free period.'

Under the first claim, Mr Fullalove used solicitors to negotiate a settlement with a builder who, he believed, was overcharging him by pounds 1,000. The solicitors' fees came to pounds 800. The second claim was similar. Legal fees of pounds 1,000 were incurred in a dispute with a surveyor over pounds 1,300. Mr Fullalove himself thinks that the arithmetic of the claims is rather ridiculous.

'The nonsense is that we seem to spend a lot on legal fees for fairly small amounts.' But that, he feels, is the way the legal system works and why he needed legal expenses insurance: 'We know that we can't exercise our rights without money. But we are not rich enough to wheel in solicitors ourselves whenever we need them.'

Mr Fullalove believes that LPG might not have to bear the cost of the third claim at the end of the day. The case against him - based on a 'small driving technicality' - may be dropped.

LPG would not comment on the case. It is the last of five insurers in the market to continue to sell legal expenses policies direct to the public. All the others have withdrawn because they have found that claims payouts are consistently higher than their premium income. And LPG is no longer trying to drum up business in this area. In fact, it put its premiums up by 30 per cent at the start of the year.

Whatever the rights and wrongs of Mr Fullalove's situation, the reality is that the insurers in general do not particularly want to sell these policies direct to the public any more.

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