Home Owners Insurance

Home Insurance in Israel in Brief

An informational article by Shmuel Weinstein.

Please note: This article is for informational purposes only. All coverages are solely according to the insurance company’s policy conditions.

Home insurance in Israel is made up of one or more of the following three basic components:

  • Structure
  • Contents
  • Third Party liability coverage

Structure Insurance For Homeowners

Your home is a valuable asset and it makes sense to purchase comprehensive structure insurance in order to protect its value.

Comprehensive structure insurance should protect your home in the event of fire, theft, vandalism, gas explosion, burst pipes, storm, and flood damages. Earthquake coverage will always be added automatically to your insurance policy unless you waive it in writing.

Your home should be covered up to its full “rebuilding costs” (the per square meter building costs without the value of the land) only. “Rebuilding Costs” do not take into account the value of the land upon which the home is built.

“Market Value” Insurance Option

In most cases it is possible to add Market Value insurance, which also covers the value of the land upon which the home is built.

Market Value insurance is recommended especially when your home is in an apartment building and not on the ground floor.

Visualize the following scenario: There is an earthquake that severely damages or destroys your building and your apartment is situated on an upper floor. The insurance company is willing to pay you in order to rebuild your apartment, but you can’t actually rebuild because the apartment owners situated below you didn’t have insurance and therefore have no money to rebuild.

You're in a predicament. The purpose of Market Value insurance is to remove you from that predicament; the idea being that you transfer your rights and title to the insurance company and they in turn pay you the market value of your home so that you can purchase without headache another home of similar value.

“Burst Pipes” Coverage

“Burst Pipes” refers to your water, heating, and sewage pipes that run throughout your home, usually under the floor, in ceilings, and concealed in walls. If any of these pipes break and you have chosen “burst pipes” coverage - all the costs of fixing the pipes and the resulting damages to your home are covered.

If you have chosen third party coverage, damages to your neighbors will also be covered. Such damages occur frequently and it is important to have this coverage.

There are different levels of coverage from which you can choose. The best option is to have “private plumber” coverage – this option gives you the freedom to choose your own plumber and other service providers. Unless your budget dictates otherwise, this is the option you should choose.

Less preferred options are with plumbing companies that are sub-contracted by the insurance companies.

Such companies are paid a flat fee per home by the insurance company and are required to repair at their expenses all covered damages. Most of these plumbing companies use plumbers and other service providers who are not their employees - they therefore have little control over the service and quality of the workmanship provided.

Others charge a slightly higher premium but use plumbers and other service providers under their employ – they are somewhat easier to deal with as they have tighter control over the service provided and the quality of the workmanship.

Structure Insurance For Renters

You're probably thinking “Why as a renter would I consider insuring the landlord’s structure?”

The answer is that you could cause a fire. If you did and there was structure damage and/or third party damages - you are liable for damages. Even if the landlord has his own insurance policy, his company will pay to fix all the damages – then turn around and sue you for their losses!

Fire insurance by itself is very inexpensive and it’s a good idea to purchase such coverage, even if you are renting.

TIP: You can protect yourself for free IF you can get your landlord to agree to add you as a policy owner to his structure and third party policy (it won't cost him extra), and IF you can ensure that the amount of coverage is adequate, and IF you can ensure that the policy will remain in force as long as you are renting.

Contents Insurance

Your contents are defined by the policy conditions as the entire contents of your home. You therefore have to insure all of your contents and cannot pick and choose which of your contents you would like to insure.

Comprehensive contents insurance should protect your contents in the home in case of fire, theft, vandalism, gas explosion, burst pipes, storm, and flood damages.

Earthquake coverage will always be added automatically to your insurance policy unless you waive it in writing.

The insurance policy requires you to insure your home contents for their full new Israeli replacement values. In addition, certain items, such as jewelry, are only covered for small amounts unless there is a written evaluation for each piece.

We therefore highly recommend that you have an expert evaluation of your entire home contents. We can arrange such an evaluation for you. The evaluation is free and you will receive a copy in English. Having such an evaluation ensures smoother and more expedient handling of claims. Of course, you must inform our office if you subsequently purchase any items of value

It is important to add “all risks” coverage to your contents. “All risks” coverage covers additional (but not all) insurance events not specifically stated in the policy conditions, such as accidental breakage to contents in your home.

Having “all risks” coverage on your jewelry will ensure that it is covered for loss and theft when worn outside your home. It is also wise to add “all risks” coverage to other items normally taken outside the home, such as portable computers and Tefillin.

Sounds confusing?

Don’t worry! Our office has been specializing in tailoring home policies to fit our clients’ specific needs for over 25 years and we will patiently guide you through the process necessary to set you up with the right insurance policy that meets your specific needs and budget.

Third Party liability coverage

Basically, third party liability insurance covers the policy owners for all monetary amounts for which the Israeli “law of damages” deems them liable. Standard coverage is up to 1,000,000 NIS, but as there is no “umbrella” insurance in Israel, it is wise to make this amount higher. Please consult with our staff regarding costs for different amounts.

Did you know?

The Talmud deals extensively with our responsibilities and liabilities when we or our property causes damages to others. This section of the Talmud is called "Seder Nezikin". The modern day Israeli law which deals with such matters is called “Pekudat Ha’Nezikin”, which in English means the “law of damages”.

 

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