Myth: All legal insurance is the same.
At first glance, all legal insurance plan options may seem similar. However, there are key differences to be aware of when shopping for legal coverage.
Most legal insurance plans are based on the health insurance model: Members must use in-network attorneys that have contracted with the insurance company. Like health insurance, this allows the insurer to negotiate lower rates with the network attorneys. This model has its pros and cons. The primary benefit is that the insurance company is able to control their costs and, thus, keep the premiums they charge their members reasonably low. However, since the attorneys are receiving much lower rates than they typically charge, they sometimes don’t provide the best service. This also limits which attorneys members can choose from. There are more than a million attorneys in the US, and networks tend to have 10,000 – 20,000 attorneys in network.
Other legal insurance providers assign a primary attorney or firm, who is paid a fixed amount per member that is assigned to them. In this model, the attorney receives their money each month whether they provide any services or not. When busy, attorneys are likely to prioritize cases for other customers who are paying the attorney’s normal rates.
There are also access plans and discount plans. Access plans typically provide legal advice over the phone to members and discount plans simply provide members an attorney who has agreed to offer discounted rates.
There are many types of legal insurance plan options available, and with a little bit of research, you can find one that fits your needs.