DAS, the provider of legal expenses cover, reports that about half the claims made are for personal injuries, 20 per cent for consumer disputes,

20 per cent for employment problems and the remaining 10 per cent for property and other disputes.

The main areas not covered by this type of insurance are matrimonial problems, libel and business disputes. Pre- existing problems are also excluded if they were matters of which you should have been aware before taking out your policy. But as part of your cover you are also provided with a legal helpline that will give you access to advice even on matters that are not covered by the policy.

The proportion of householders with legal expenses cover is relatively high. David Haynes, an underwriter and product development manager at DAS, says: “We estimate that between 50 per cent and 60 per cent of the population have legal cover through their household policies, but many are unaware of it.”

This is confirmed by a report by Mintel, the consumer research company, which shows that a significant proportion of consumers were unable to say whether they had legal cover or not. Mintel says that this may be because of indifference towards the product as well as a lack of understanding.

Some householders are provided with legal expenses cover automatically. Defaqto, the information provider, found that 25 per cent of home contents policies include legal expense cover as standard.

However, in most cases consumers will have to pay an extra premium, with 60 per cent of household policies offering legal expenses cover as an optional extension at an average cost of just over

£14 per annum. This normally provides cover for up to £50,000 of legal expenses.

On motor insurance policies, 25 per cent of products incorporate legal cover automatically, while 40 per cent offer it as an option at an average cost of just over £19.50. In most cases the cover is provided by specialist legal insurance providers, such as DAS, Capita and First Assist.

If you feel that legal action is required, the legal insurance provider will ask specialist solicitors to look at your case first. But they will not necessarily take it further.

Peter Smith, a technical director at First Assist, which offers its own separate legal expenses policy, says one condition of this type of insurance is that there has to be a reasonable prospect of winning. “We will not pursue a case unless there is a better than evens chance of winning.”

He says that this can be seen as part of the value of the policy, saving people from spending money on a hopeless case.

Certainly in exchange for a premium that would probably buy less than a quarter of an hour of most solicitors’ time, legal expenses cover looks like quite a bargain. It is something that policyholders should ensure they do not overlook.