At the National Insurance Awards held in London on 6th March, Lexelle triumphed in the Innovative Products category! The winning product is the new Residential Property Legal Expenses proposition that was developed following the identification of an issue raised by a broker partner.
The Issue Addressed
The Lexelle broker partner has a large book of Family Legal Expenses Insurance (FLEI) business for customers that is sold alongside home insurance.
It became apparent through claims activity that some customers were not occupying the home in the traditional manner for which the product was developed – that of a primary family home. There were examples where the property was unoccupied, or a second property, meaning the policy was not necessarily providing the cover required by the customer.
Brokers are not always notified of changes of use and even if they are, not all have the range of products for customers changing circumstances. A key reason for this is systems capability.
It can prove expensive for brokers to add a range of covers to their systems, with different policy wordings and ratings, it also adds an additional training burden for broker staff as well as increased product oversight for compliance.
The Lexelle Solution
The Residential Property Legal Expenses policy was developed as a ‘catch all’ product to cover a range of residential property uses. It is a single policy wording for Family Legal Expenses Insurance, Unoccupied Legal Expenses Insurance, or Second Home Legal Expenses Insurance, and a single flat rate premium rate applies across the board. A ‘tick box’ table was developed and embedded into the wording to document the covers provided by the policy, depending on the property use as follows:
| Section | Cover | It is your principal home? | It is a 2nd home/unoccupied property you own |
|---|---|---|---|
| 1 | Free Legal Advice | ✓ | ✓ |
| 2 | Personal Injury | ✓ | X |
| 3 | Employment Disputes | ✓ | X |
| 4 | Criminal Prosecution Defense | ✓ | ✓ |
| 5 | Tax Protection | ✓ | X |
| 6 | Jury Insurance | ✓ | X |
| 7 | Probate | ✓ | X |
| 8 | Contract Disputes | ✓ | ✓ |
| 9 | Property Protection | ✓ | ✓ |
| 10 | Education | ✓ | X |
| 11 | Identity Theft | ✓ | X |
| 12 | Social Media Defamation | ✓ | X |
For customers living in their principal home the insurance applies for every section of cover, and therefore there are ticks in every box. Cover is more limited in the case of second homes and unoccupied properties, and so each head of cover has a simple tick or a cross alongside it to denote if cover is applicable.
If the property use changes mid-term there is no need to notify the Broker or Lexelle, no additional premium is required to be paid, the policy simply operates according to the changing circumstances of the customer.
Two variations of cover have been developed – Platinum and Platinum Plus, and the only decision that the broker needs to make is which level of cover to offer. Work is currently being undertaken to develop the products further – we will share details in the coming months!
The Impact of the New Residential Property Legal Expenses Insurance Product
The Residential Property Legal Expenses Insurance product has now been launched and is available to all broker partners. Those that have taken this cover on board have given glowing feedback. There is no wonder that the product is so popular when you consider the benefits offered – some of which are summarised below:
Policy Holders:
- Clients are able to access cover that may never have been offered before that is tailored to the needs of unoccupancy or second homes.
- There is no need to contact the broker when change in circumstances occur.
- The new product is simple to understand thanks to a table that clearly denotes areas of cover relating to occupancy.
- Cover and indemnity levels are applicable to the risk and clients needs depending on their circumstances.
- Customers are always on cover – and the right level of cover.
Brokers
- The new policy is a simplified single product with a single policy rate that is the same price as FLEI cover.
- The product enables the broker to offer a range of FLEI covers under a single product.
- The single product simplifies staff training and mitigates the chance of mis-selling incorrect cover.
- The single product simplifies the compliance position with a single wording rather than a range of propositions.
- There is no need for mid term adjustments, additional or return premiums.
- Accuracy and efficiency is improved across the board.
A further benefit for all is that the premium rate is no higher than that charged for the standard Family Legal Expenses proposition, despite additional areas of cover attracting a higher underwriting rate. Lexelle has been able to absorb the additional cost due to the unique claims handling capability that Lexelle can deliver via the wider Group expertise.
This development plays to the strength of the Consumer Duty by ensuring that customers always have legal expenses protection, irrespective of changing circumstances. It also simplifies staff training needs with a single wording, a single price, and it is a tick in the box for systems development too!
If you would like to know more about cover than please look on our website and fill in the contact form and we will be happy to discuss the product further!