Israeli car insurers not rushing to assist stay-at-home owners
24 April 2020 - The jerusalem post
The first companies to provide a financial boost to their stationary consumers were Allstate, returning 15% of customers' monthly premiums in April and May.
Ordered to stay home unless necessary, most Israelis have not ventured out beyond 100 meters for weeks. Their vehicle's mileage has not budged much either, except for rare sorties to the nearby supermarket.
In the United States, nine of the largest car-insurance companies have announced significant rebates on insurance premiums, representing welcome news for many families facing unprecedented financial struggles.
The first companies to provide a financial boost to their stationary consumers were Allstate, returning 15% of customers' monthly premiums in April and May, worth $600 million, and American Family, which provided a one-time $50 payment for each customer, valued at $200m. in total.
A similar initiative has been launched by Britain's largest car insurer, Admiral, which granted a £25 ($31) refund to all customers, representing 4.4 million vehicles and a refund totaling £110 ($136).
Twenty-five MPs wrote a letter to British Chancellor of the Exchequer Rishi Sunak to demand a reduction in insurance premiums, The Daily Telegraph reported, citing a 50% drop in claims and an expected profit of £1 billion ($1.23b.) for car insurers from customers not currently using their vehicles.
Despite Israeli citizens being subject to some of the world's most stringent lockdown measures, and the risk of accidents dropping sharply as most vehicles remain off the road, local insurance companies have not offered similar gestures for owners of the country's 2.9 million insured vehicles.
So how are some of Israel's largest insurers responding to the crisis?
AIG, for example, has informed existing customers that they can freeze their comprehensive insurance and receive a 50% discount on their premium for the length of time that their vehicle is stationary. Rather than a minimum period of 30 days, customers can freeze their insurance for 14 days. For new customers, the company is offering a 15% discount on insurance, with an option to delay payments for two months.
Ramat Gan-headquartered Harel Insurance similarly enables insurance-premium refunds going forward, although a representative refused to comment on the possibility of rebates. Instead, for individuals traveling modest distances during the current period, the company emphasizes its Harel Switch policy, which charges insurance according to mileage covered.
At Migdal Insurance, customers can opt to take out comprehensive insurance without coverage for theft and total loss. For customers not using their car for at least 30 days, a 50% discount on their premium is available.
It seems that the most generous option offered by all companies to vehicle owners stuck at home for the long term is found in a customer-protection mechanism developed by the Finance Ministry's Capital Market, Insurance and Saving Authority.
According to the authority, customers have the right to reduce their comprehensive insurance to just third-party insurance and compulsory insurance in three cases: where the insured travels abroad for a long period; if the policy owner is not permitted to drive due to poor health; and if the car will not be used for at least 30 days.
Should any of these criteria be applicable, insurers must accept a customer's request to freeze their comprehensive insurance, the authority says.