What can I do if legal expenses insurance refuses to pay despite confirmed cover?
In short
What you can do depends on why the insurer refuses to pay despite confirmed cover. In Germany it is usually one of five reasons: fees above the statutory scale, a settlement cost split that does not match your result, an appeal not agreed in advance, the deductible or an exhausted sum insured. Ask for the reason and clause in writing, object, and if needed go to the ombudsman, binding up to EUR 10,000.
Figures from the model conditions, a litigation cost calculator using fees since June 2025 and the ombudsman's rules.
Example
Typical range
Own costs first instance, value in dispute EUR 10,000
about EUR 2,812
Cost risk first instance, value in dispute EUR 10,000, lost
about EUR 4,776
Cost risk first instance, value in dispute EUR 5,000, lost
about EUR 2,668
Distance to court from which a correspondence lawyer is paid
over 100 km, first instance only
Usual deductible per case
EUR 150 to 300
Insurance ombudsman
EUR 0, binding up to EUR 10,000, admissible up to EUR 100,000
As of October 2026.
The costs in the worked example are calculated under the German fee acts RVG and GKG in force
since 1 June 2025: per lawyer the procedure, hearing and settlement fees with expenses and VAT,
plus one court fee after a settlement.
The deductible range is a guide value from our quoting practice.
Your own tariff wording decides and may differ from the model conditions.
Worked example
Settlement for EUR 6,000 on a claim of EUR 10,000
You settle in court, each side bears its own lawyer, court fees are split.
Share of the claim obtained
60 percent
Total costs of both sides
about EUR 5,760
Your share under the settlement
about EUR 2,880
Paid by the insurer, 40 percent of total costs
about EUR 2,300
Left with you, plus deductible
about EUR 580 plus EUR 150
With a 40 to 60 cost split in the settlement, the insurer would have paid your whole share. As it is, about EUR 730 stays with you.
What confirmed cover binds
Under the prevailing view in German law, cover confirmation (Deckungszusage) is an acknowledgement. The insurer cannot later rely on reasons it already knew or expected when confirming, such as the waiting period or an early start of the dispute. A regional court held a legal expenses insurer to its confirmation in 2025, although it later wanted to limit cover.
Confirmed cover still has limits. It applies to the dispute described and the instance named, within the sum insured and under the billing rules of your tariff. Anyone who gave false information in the request cannot rely on it.
Common cuts despite confirmed cover
When legal expenses insurance refuses to pay in full despite confirmed cover, one of these rules is almost always behind it. Some cuts are justified, others can be reversed with good arguments.
Reason for the cut
Justified?
What you can do
Hourly rate above statutory fees (RVG)
yes
agree the difference with your lawyer before instructing them
Lawyer not based at the court, travel costs
partly
if the court is over 100 km away, the tariff pays a correspondence lawyer at first instance
Settlement cost split does not match the result
only for the difference
ask for the calculation; the insurer must prove the conditions
Appeal or extended claim not agreed
only for gross negligence or intent
show the insurer would have agreed if asked
Second lawyer after a change
yes, for the extra costs
change lawyers only for good reason
Deductible
yes
check that linked cases are charged only once
Sum insured exhausted
yes
check the sum before large cases
The settlement trap
The model conditions let the insurer pay settlement costs only in line with the ratio between what you claimed and what you obtained. If you claim EUR 10,000, settle for EUR 6,000 and agree that each side bears its own costs, you have taken on more costs than your result justifies. That part is not paid despite confirmed cover.
The clause must be read narrowly and the insurer must prove its conditions. The Federal Court of Justice held that there is no cost concession if each side bears its own costs out of court and you had no claim to cost recovery against the other side anyway. Agree the cost clause of any settlement with your insurer before signing.
When you have to pay money back
In criminal and traffic offence cases the policy first pays for your defence. If a court finally finds you acted intentionally, the model conditions require you to repay the costs. That repayment is justified despite confirmed cover.
You also have to pass on costs the other side reimburses after you win, if your insurer had already paid them. Keep only what you paid yourself, such as the deductible.
How to challenge a cut
Ask first for a written statement naming the clause behind the cut, and let your lawyer comment. Many cuts rest on a wrong settlement ratio or on an assumption the insurer cannot prove.
If the insurer will not move, file a complaint with it and then turn to the insurance ombudsman (Versicherungsombudsmann). The procedure is free, decisions up to EUR 10,000 bind the insurer, and limitation is suspended while it runs. The last step is a lawsuit against your own insurer.
When the insurer is right not to pay
To be honest, many cuts despite confirmed cover are justified. No tariff pays an hourly fee above the statutory scale, and an appeal without agreement is a real risk. A short check with your insurer before every step that costs money usually means you pay only the deductible in the end.
Step by step
Ask for a written statement naming the clause behind the cut.
Put confirmation, statement and settlement side by side and recheck the ratio.
Let your lawyer comment on the cut.
File a complaint with the insurer.
Go to the insurance ombudsman if the answer stays no.
Only then consider suing the insurer.
Checklist
Cover confirmation with scope and instance in hand
Settlement cost clause agreed in advance
Fees agreed at the statutory scale or difference known
Every new step reported beforehand
Refunds from the other side passed on
Sum insured enough for the case
Common mistakes
Signing a settlement where each side bears its own costs without asking the insurer
Agreeing an hourly rate and expecting full reimbursement
Filing an appeal before new confirmation arrives
Accepting a cut without checking the calculation
Questions and answers
Frequently asked
Can the insurer withdraw confirmed cover?
It cannot later rely on reasons it already knew when confirming.
It is different if the request contained false information or, in criminal cases,
if intent is later established.
Why does the insurer pay only part after a settlement?
Because it bears costs only in line with the ratio of claim to result.
Costs you took on beyond that stay with you.
Do I pay my lawyer's hourly fee myself?
The part above the statutory fees, yes.
Clarify this before instructing the lawyer.
How long can I challenge a cut?
Contract claims usually become time-barred after three years, counted from the end of the year.
The ombudsman procedure suspends this.
Is the ombudsman worth it for small amounts?
Yes.
It costs you nothing, and up to EUR 10,000 the insurer must follow the decision.
