Car Insurance in Israel

Car insurance in Israel is split into two parts:

• Compulsory Insurance (Bituach Hova)
• Comprehensive Insurance (Bituach M'kif)

Compulsory insurance:

As its name suggests, all cars are required by law to be insured with a compulsory insurance policy, and it is an offense to drive a car without one.

The compulsory insurance covers personal injury and death (G-d forbid) only, for the driver of the car, passengers in the car and third parties. The policy does not cover any kind of damage to the vehicle or third party property. The compulsory insurance policy is a no-fault insurance policy.

The rates for compulsory insurance vary by as much as 15% between the different insurance companies, the two main factors affecting the premium being the age of the youngest driver and the size of the engine. You should shop around for compulsory insurance, since there is in any case no formal requirement that you purchase compulsory insurance from the same company providing you with comprehensive insurance. However, you should be aware that insurance companies sometimes offer special conditions if you purchase both insurances together. There is no deductible on compulsory insurance.

Comprehensive insurance:

Comprehensive insurance covers your car for theft, total loss, partial loss because of accident, whether caused by the driver of your car or as a result of damage to your car by another vehicle, third party property liability insurance, personal effects up to a certain amount, radio/tape/CD up to a certain amount, a replacement car whilst your car is being repaired or in the case of theft or total loss for up to 30 days or until the insurance company pays the claim. Most policies also include cover for windshield breakage, roadside repairs and towing.

Premiums:

The premiums vary significantly between the various insurance companies, and you should definitely shop around for comprehensive insurance as you can make significant savings on premiums. The main criteria, in principle, in determining the premiums are the age of the youngest driver, the value of the car, the claims record, and the security devices installed, but once these criteria have been taken into account, each insurance company relates to each car differently and makes its own determination as to the premium. All companies give a discount for not driving on Shabbat.

Anti-theft devices:

On the subject of security devices, again there is some degree of variation between the various insurance companies, and since the cost of some of the more advanced devices can run to 3,000 – 4,000 NIS, this is something that needs to be taken into account when selecting which insurance company to work with. Most companies offer significant discounts on premiums if you go for the more advanced security devices, whether in the form of a reduction in premium or in the form of actual cash participation in the cost of installing the anti-theft equipment.

Deductible:

The deductible payable on claims depends in most cases on the type of garage you use to repair your car. There are three types of garages: the insurance company-approved garages (musach hesder), and the garages which are approved by the importer of the car, or ordinary repair shops. If you take your car to an insurance company-approved garage you pay a deductible which is around 40% less than in the other type of garage (around 950 NIS instead of around 1,600 NIS).

Claims:

You pay the deductible amount directly to the garage, and the garage then settles the account with the insurance company. In the case of the other garages, you pay the bill in full and claim back from the insurance company. The standard of the repairs at the insurance company approved garages is reasonable but not outstanding. If your car is under warranty, you should think about taking it to an importer-recognized garage, so as not to risk the warranty becoming invalid.

In the case of cars bought on immigrant rights, settling the claim in the case of theft or total loss also involves going to the customs authority to get a release form. The insurance company pays out the full used value of the car including tax (less the deductible). The used value of the car is determined in accordance with the monthly price list for used cars ("Levy Yitzhak", after the name of the firm that publishes it). The book lists every single type of vehicle on the road in Israel, by model year, with its value.

Buying car insurance:

Sales of car insurance are done by two entities: insurance brokers and the "direct" insurance companies. The advantage of the insurance broker is that you can expect a high standard of service, especially in solving the "gray" areas and going into bat for you if you have a claim. A good broker would work typically with a number of insurance companies. Insurance bought through the "direct" insurance companies tends, at least in the first year, to be cheaper than going through a broker. However, there is considerable anecdotal evidence to suggest that the standard of service you can expect to receive is significantly lower. At the end of the day, it is service that counts, so that if you have a claim it is cleared with a minimum of tension and inconvenience.

This is a general survey of car insurance in Israel, and is by no means comprehensive. When buying car insurance you should go to a professional who can give you complete advice and obtain the best policy for you.