Controversy over tax deductibility for legal protection

The new legislation on tax deductibility for legal protection, providing a tax advantage of 124€/year for those who subscribe to a legal protection insurance, came into effect on the 1st of September.

However, in spite of the fact that this legal text aims at improving middle-class citizens access to justice, citizens feel they have been tricked. The new law has been a target for criticism because insurers have increased their premiums by the same amount as the tax advantage.  As a matter of fact, the coverage allowing a tax deductibility must cover a wide range of risks, including liability, criminal law, tax law, labour law, contract and consumer law, inheritance law, donations and wills, divorce and family law.

Patrick Cauwert, CEO of the Federation of Insurance Brokers, explains that up until now, there were small bits of legal protection scattered in many different insurance companies. Families had to pay for double or triple legal protection insurances to benefit from a full legal protection coverage. Moreover, the reimbursement ceilings were very limited and the coverages were actually full of loopholes. According to Patrick Cauwert, it is better to prioritise legal insurance in “stand alone”, where citizens can pay only one premium and have the guarantee of full coverage.