How my idea turned into a website that can save motorists hundreds of £million.
Today we have a guest post on the blog from Lee at Free Motor Legal Ltd… he has shaken up the motor insurance marketplace for the best and can save motorists millions…
I have been chatting to Lee online for a couple of years now, he told me all about free legal cover and I set it. I have never since ticked that box when renewing my car insurance! Over to Lee to explain more.
Lee is an Insurance Legal Expert
For many years I have sat at a desk at insurance companies and law firms dealing with road accident claims. I made a comfortable living and always did the very best for my clients. But something always irked me with these motor claims. The motor legal protection policy, and the reason the clients were being passed to the firms I worked for.
Yes there was a legal expenses policy present, which covered up to £100k of legal expenses for pursuing a claim following an accident that was not your fault, but what actually happens behind the scenes was somewhat of an eye opener.
You see, the policies, how they are worded and the agreements the insurers have with the law firms; steer a customer and be engineered to prevent the insurer from really having to pay out any legal fees.
Those £30 legal policies we agree to are worth 50p!
I delved deeper into this and discovered that the typical cost of the policy which gets sold to motorists at a premium of £30 had actually only cost the insurer, broker or price comparison site you bought it from around £0.50p, yes 50 pence!
The reason for the low cost of the product was due to the rare possibility of the underwriters ever needing to pay out on any claim. So basically you have the insurer behind the policy gobbling up lots of basic premiums at 50p a time with a requirement not to then do anything! You have the insurer, broker or price comparison site then selling it for £30 to you and making a massive mark up of 6000%!
The product works, I’m not denying that, in that it passes a motorist who needs to claim for losses and expenses and any compensation following a non-fault accident to lawyers to pursue their claim. But the product is never “used” as the chosen lawyers are prevented from seeking any costs from the policy as a condition of being on the panel of approved firms to receive the work.
Setting up a free alternative that works
On seeing that there was no true “value” in the product I set about putting together a free alternative for motorists, knowing full well that it mattered not to lawyers if there was a legal expenses policy present or not.
I first had the idea back in 2002, but as with so many business ideas people have and the reliance on a regular salary, it would not be until 2012 before I finally made that push and set about doing something.
All motor legal protection policies contain a clause stating that for any legal assistance in pursuing a claim, the claim must have “reasonable prospects of success”. In layman’s terms a better than 51% chance of succeeding which allows claims which lack merit or evidence to be declined and no assistance would be provided.
This is the general standard that any lawyer will apply when assessing the merits of pursuing a claim. Whether it’s acting under a legal expenses policy or using a no win/no fee arrangement, essentially, if the lawyers win your case, the insurers of the at-fault party who collided with you pay any legal costs.
If the lawyers do not win your case, they have to absorb the costs and write them off either because
- this is what they agreed with your legal expenses insurer in order to be on their panel or
- due to the terms of the no win/no fee agreement.
Because of this I was able to set up freemotorlegal.co.uk which instead of charging motorists for an annual policy at £30.00 with provide them with free lifetime membership.
A hub of information is available with this free membership
Members then can use their membership to access the hub of services available to them after a collision that was not their fault. This can often avoid them needing to claim via their own insurance policy and also avoids the need to pay any excess and no loss of no claims discount.
We also have access to specialist solicitors who will recover losses and expenses or pursue injury compensation claims and the member keeps 100% of their compensation as the lawyer’s fees are paid by the insurer of the other party.
Our service providers have access to over 3000 vehicles and a nationwide repair network of quality repairers, so any vehicle repairs can be taken care of and a suitable replacement car, van or motorcycle provided for the duration you are without a vehicle. This can often involve no payment of a policy excess.
Key feature – Vehicle recovery
One key feature is our vehicle recovery service. Did you know that the big 3 breakdown companies will all raise an invoice to their members if they have to recover you after an accident because it is not a “breakdown”?
Members are actively encouraged to contact us immediatly after a non-fault collision. We can save them both time, money and effort in getting any claim resolved.
£30.00 may not sound like much, but consider the 30 million motorists in the UK with the majority of them paying the typical £30.00 for motor legal cover. The annual bill could be as high as £900million!
I’m extremely proud of the savings we can make for UK motorists by using insider knowledge on how a product operates and taking a different approach which disrupts the marketplace.
It is not too dissimilar to how other financial products and services have evolved, for example you no longer pay to get your credit score due to the ways that new businesses such as Clear Score have disrupted the marketplace. I see no reason why motor legal protection with free alternatives like Free Motor Legal cannot disrupt the marketplace and drive down the costs for consumers either!
Summary from Mrs Mummypenny
What a fantastic service that I urge you to sign up to, it’s free so why not? I have done this and really do take great enjoyment in the fact that I don’t tick that legal box and pay an extra £30 to my motor insurance policy.
This is a collaborative post with Free Motor Legal.