how do i explain to someone who has had insurance for 10 years that they can't get back the premium they paid all those years?
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After the event insurance is a type of insurance which is designed to protect people from legal costs if they take a case to court. It is purchased after the event which would trigger litigation, which is why it is known as “after the event insurance,” in contrast with before the event insurance, a form of legal protection insurance which is purchased to protect people from legal fees if something happens. Many insurance policies have before the event insurance built in. A car insurance policy, for example, includes a clause which will cover legal damages.
With this type of insurance, when someone thinks that he or she may be going to court with a case, an insurance company can write an after the event insurance policy which will cover the client's legal fees. If the client wins the case, his or her opponent will pay the fees in some cases, including the premium for the after the event insurance, but if the client loses, the insurance will cover the expenses that he or she would otherwise have to bear.
Typically, the premium for after the event insurance is due after the conclusion of the legal case. For clients who win, the cost of the premium is passed on to the loser as part of the legal fees in cases where that is applicable. If a client loses, the insurance policy may include a clause which insures the premium, so the client will not have to pay it.
Attorneys who take on so-called “no win, no fee” cases often ask their clients to buy after the event insurance, so that if they lose, they will still be compensated. It is also good to consult a lawyer when purchasing such insurance, even if someone is not positive that a case will end up in court, because the lawyer may have suggestions about insurance companies to use, and he or she can also review the policy to confirm that it will be suitable and effective.
This specialty insurance product is not offered by all insurance companies. Insurance companies will usually review a situation carefully before issuing a policy, to determine how much risk is involved in issuing the policy, and many write custom policies which are very specifically tailored to particular situations. When purchasing an after the event insurance policy, clients should make sure that the policy fully covers them and their case, and they should ask about how the premium will be handled.
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