Insurance companies will increase the compulsory car insurance rates by 5%, and in some cases even more. Representatives of the companies asked the Treasury to approve an increase in tariffs even at higher rates, but the Treasury refused. Compulsory insurance is designed to cover bodily injuries caused by accidents of drivers and passengers.
The request for an increase in tariffs stems from the increase in the cost of caring for victims of road accidents and the rulings of the courts to pay the victims greater compensation. Another factor in this is a change in the method of consideration with the health funds. In the past, the expenses of caring for victims of road accidents were burdened by the funds, but following the change from a few weeks ago, the insurance companies began to finance the costs of the care themselves. The companies originally demanded that the mandatory rates be raised by 10% or more, but the Supervisor of Insurance intervened and prevented this.
In parallel with the increase in compulsory rates, insurance companies will also increase their comprehensive insurance rates in recent days. One reason for this is the surge in the volume of vehicle thefts (especially in January 2022). The increase in theft is due to the urgent need to obtain used spare parts, which some garages use to repair cars due to the acute shortage of new spare parts.
During the Corona period, the Treasury forced the directors of insurance companies to freeze the increase in insurance rates, and in some cases even reduce them. This was due to the sharp decline in the volume of vehicle use and at the same time the decline in thefts. In recent weeks, however, this trend has completely changed.
The Supervisor of Insurance, Dr. Moshe Barkat, told Maariv: “The insurance companies did ask me to raise the mandatory rates beyond the cost incurred by Paul Insurance Companies (the joint company in the industry that manages compulsory insurance – YS). I am strict on the issue. Price increases, but this time it is an inevitable move. “
“I inevitably approved a moderate increase in tariffs due to the change in the insurance industry’s consideration with the health funds. The stability of the insurance companies must be maintained. Overseas reinsurers also pressured to raise tariffs due to losses caused to them,” he added.
On raising comprehensive insurance rates, Barkat added: “In these areas, the market is competitive and there is restraint in increases. We do not interfere with the price in this area. There is healthy competition, and as long as there is no price rampage, we will not intervene.”