Monitor recommends raising compulsory car insurance

The Insurance Services Office of Israel (ISO) recommends raising the price of compulsory vehicle insurance by 7.8%. The ISO operates a database of compulsory vehicle insurance, and advises on rates. The recommendation reverses years of recommending lower rates, because of the rising cost of lost years of earnings of victims of traffic accidents.
The ISO notes, that were it not for the effect of risks and external developments on the Israeli insurance market in recent years, compulsory vehicle insurance should fall by a further 7.6%. However, the Supreme Court ruled that insurance companies must cover the lost years of earnings of victims of traffic accidents.
Other factors that are driving a rise in compulsory vehicle insurance are the effects of WHAT claims by the National Insurance Institute against the perpetrators of traffic accidents or third parties, which raise compulsory vehicle insurance rates by an estimated 3%; changes in the retirement age, which raise rates by 1.6%; amendments to the law for claims restitution, which raise rates by 1.5%; and rising hospitalization costs, which raise rates by 1%.
The ISO also raised the interest rate on capitalization that it uses to calculate its compulsory vehicle insurance recommendation from 2% to 3%, because of the very low interest rate in, which has a direct impact on insurance companies' activity.
Compulsory vehicle insurance is a very competitive business, and there are substantial differences in the policies offered by different companies. The vehicle calculator at the Ministry of Finance website enables price comparisons.


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