Questions and Answers about Home Insurance in Israel

Home, Property and Contents Insurance

U ask: Can you give me an overview of the position of Home
Insurance in Israel today?

U ask: What types of home insurance policies exist?

U ask: Which is a better policy?

U ask: I am renting an apartment – what home insurance do I require?

U ask: Is this expensive?

U ask: What about insuring the structure?

U ask: What is included in the structure?

U ask: When I took out a mortgage the mortgage bank
made be insure the structure. Is this good enough?

U ask: Can I then take out my own policy through my own
Insurance Agent?

U ask: What are the deductibles?

U ask: How are valuations made of the contents and
structure?

U ask: Speaking of claims – how are they dealt with?

U ask: I bought a property in Israel for investment or
vacation. How do I get it insured?

U ask: Can you give me an overview of the position of Home Insurance in Israel today?

Norman answers: Whether you own or rent a property in Israel you will want to protect your investment both of the building itself and the contents. Generally speaking Insurance Companies here give home insurance cover for the following risks – fire, water damage, natural disasters, earthquakes, burglary, third party and employers liabilities.

U ask: What types of home insurance policies exist?

Norman answers: There are 2 types of home insurance policies available. A standard policy that works on the principle that cover exists for all the possible risks that are "specifically stated" in the policy. An "all risks" policy basically operates in the opposite way i.e. you are covered for all risks unless they are "specifically excluded" in the policy.

U ask: Which is a better policy?

Norman answers: It isn't necessarily a matter of what is better or not; what you need to look at is which policy better suits your needs and budget. Generally for the contents the all risks policy is more advisable as it gives broader coverage, however it costs some 15-20 % more than the standard home insurance policy.

U ask: I am renting an apartment – what home insurance do I require?

Norman answers: Normally the building structure itself is the responsibility of the landlord to insure. You should though check this out in your rental contract. What you are best advised then to do is to take out a home insurance policy to protect your contents.

U ask: Is this expensive?

Norman answers: The cost depends on the type of policy, the position of the apartment in the building ( middle floors are the cheapest to insure ), the security of the apartment and of course the total value of the contents. A home insurance policy insuring contents of around NIS 200,000 value on a quality all risks policy would cost around NIS 1,050 annual premium.

U ask: What about insuring the structure?

Norman answers: It is important to note that in Israel we insure the structure not for market value of the property but for
re-building costs in case of damage. Generally we take the value to be between $800 to $1,000 per sq.m. depending on location, age and the quality of building.

U ask: What is included in the structure?

Norman answers: A correctly professional written policy will include both the physical structure and all the built-in fitments such as kitchen cabinets, closets and cupboards, heating and central air-conditioning systems.

U ask: When I took out a mortgage the mortgage bank made be insure the structure. Is this good enough?

Norman answers: The home insurance policies they offer are generally the minimum no-frills standard policies as the only risks that they are really interested in is in protecting their loan to you. These policies generally lack sufficient cover for the built-in fixtures, third party and other liabilities. They also do not include contents insurance.

U ask: Can I then take out my own policy through my own Insurance Agent?

Norman answers: Yes, absolutely. The law allows you complete freedom of choice both of whom you choose to insure with and the type of home insurance policy. You would have to add though a lien in the policy in favour of the Mortgage Bank for the structure.

U ask: What are the deductibles?

Norman answers: Standard deductibles on most home insurance policies nowadays is around NIS 500 for all sections of the policy except for earthquakes which is normally 10%.

U ask: How are valuations made of the contents and structure?

Norman answers: When you take out the home insurance policy your Agent will make together with you a general valuation to get things going. He should then send you an Assessor to come and make a detailed accurate valuation. The cost of this is borne by the Insurance Company. A proper valuation is very important to protect you from being either over or under insured and also in case of claims, to prevent there being any possible dispute as to what existed and what it was valued at.

U ask: Speaking of claims – how are they dealt with?

Norman answers: All Insurance Companies maintain a 24 hour claims service in case of need. However, here comes the service of your professional Insurance Agent. He is there to handle all the details of your claim and you are best advised to contact him directly even before you call the Insurance Company. A good Agent will guide you through the process and ensure that the claim is handled correctly and speedily.

U ask: I bought a property in Israel for investment or vacation. How do I get it insured?

Norman answers: In principle the home insurance policies are the same as for those who are living regularly in the property. However, there is a different rate for properties that are considered "unoccupied" that is to say are unlived in for a period of more than 60 days at a time. It is important that your home insurance policy be written correctly and you are best advised to contact a qualified Agent to protect your investment.