Tractor stuck in floodwaters - insurer's obligation to compensate
Dec 31, 2025
By: Shlomi Hadar, Esq.
Factual Background
In an important ruling recently issued (10/25) in the Magistrate's Court in Krayot, the court addressed a complex question in the field of agricultural vehicle insurance: Can an insurance company reject a claim for insurance benefits for a tractor that was damaged after getting stuck in floodwaters, on the grounds that it involved gross negligence or policy exclusions? And is an insurer permitted to raise new arguments in summations that were not raised in the original rejection letter?
On January 31, 2024, at approximately 06:00, an agricultural tractor owned by Nir Carmel Farm was traveling through an agricultural passage under Highway 70. During the drive, the tractor entered a water puddle that formed following rainfall. Water penetrated the internal parts of the vehicle, including the electrical systems and engine, and the tractor became stuck. Despite the driver's attempts to extricate the tractor by reversing, the vehicle remained stuck, and the water level continued to rise due to continued rainfall.
The appraiser on behalf of Clal Insurance estimated the damage at NIS 44,500 (excluding VAT), and determined that "water penetrated most of the internal parts of the tractor... the engine was flooded with water... in my estimation the extent of the damages is significant and one should consider the viability of repairing the vehicle." Nevertheless, Clal Insurance rejected the claim with varying arguments throughout the proceedings.
The parties' claims
Clal's Position - Refusal to Pay
Clal refused to pay the insurance benefits, raising various reasons throughout the proceedings:
In the initial rejection letter, Clal claimed that the tractor driver's behavior was not reasonable when he attempted to cross a flooded water passage, as a tractor driver "should be more skilled and experienced." Additionally, Clal argued that the occurrence of the accident is inconsistent with the version in the claim form, according to which the tractor "sank in a water hole."
In the statement of defense, Clal's main argument was that the farm driver acted with "gross negligence" when he chose to cross a deep water puddle.
In Clal's summations, additional new arguments were raised for the first time: that the alleged event does not constitute an insured event because it lacks the characteristics of "suddenness" and an external cause; that policy exclusions apply relating to internal mechanical damage or damage from a water source; and only alternatively, reiteration of the gross negligence argument.
The Farm's Position
The farm argued that the event constitutes a definite insured event covered under the policy. The tractor was traveling on an established agricultural road, which is the only route for passage under Highway 70, and which the tractor driver has routinely traveled for about three years. The driver testified that in the past he had successfully passed through the same road when there was standing water, but this time the water level rose suddenly and unexpectedly due to significant rainfall.
The farm added that when the driver began traveling through the passage, the water level was lower, but rose rapidly during the drive. The driver attempted to extricate the tractor by reversing, but without success, and the water continued to rise due to continued rainfall.
The court accepted the lawsuit in its entirety and rejected Clal's arguments. The main reasons are as follows:
Broadening the scope and raising new grounds - The court ruled that the new claims that the insurer raised in its summary – that the event is not an insured event, or that exceptions to the policy exist – constitute broadening the scope and are rejected outright. These claims did not appear at all in the original rejection letter, thus completely violating the obligation to provide reasons imposed on an insurer.
This is an insured event - the court ruled that the event meets the definition of an "insured event" according to section 4.1 of the policy. The judge ruled that these components are present in this case: This is the only and regulated way to cross the agricultural fields, and not a roundabout or risky route, the driver used to travel the same route regularly, every day, even when there was water, and in the past he managed to cross without a problem, and also when the driver began the journey, the water level was lower, but rose suddenly due to significant rainfall - thus the element of suddenness and the existence of an external factor are present.
In addition, the court rejected Clal's claims that there were exceptions to the policy. The court also rejected Clal's main claim regarding gross negligence, referring to the Supreme Court ruling in the Polikov case, according to which an insurance policy is intended to protect the insured also from his own negligence, and only in exceptional circumstances can the insurer be exempted from its liability.
The judge ruled that in the rejection letter itself, she did not allege gross negligence, but only behavior that was not appropriate for a reasonable driver. Moreover, she did not at all prove the existence of the conditions required for gross negligence – the objective condition (a significant deviation from the standard of care) and the subjective condition (a state of mind of recklessness or carelessness).
The court's decision
סיכום
This ruling constitutes an important precedent in the field of agricultural vehicle insurance and insurance law in general. It emphasizes the duty of reasoning imposed on insurance companies, and the prohibition against raising new arguments at a later stage. An insurer who wishes to reject a claim must detail all its reasons in the initial rejection letter, in a clear and lucid manner.
The ruling reinforces the principle that an insurance policy is intended to protect the insured even against ordinary negligence. Only in extreme cases of gross negligence, with a mental state of recklessness or indifference, will the insurer be exempt. Driving on the established and only route for passage, which the driver has used for years, is not gross negligence - even if it turned out in hindsight that the water level was particularly high on that day.
The ruling also emphasizes the importance of narrow interpretation of exclusions. Policy exclusions must be defined precisely and clearly, and in case of doubt - the interpretation will favor the insured.
For insurance companies, the ruling serves as a reminder to invest in drafting clear and detailed rejection letters. All reasons must be specified at the first opportunity, and one should not rely on the possibility of raising new arguments later in the proceedings. A company that fails to do so may find that its arguments are rejected outright, without substantive examination.
For insured parties, the ruling provides important protection. It establishes that ordinary negligence is covered by the policy, and that the nature of the policy and the type of vehicle must be taken into account. An insured who purchased a policy for an agricultural vehicle is entitled to reasonable expectations that the policy will cover risks arising from normal use of an agricultural vehicle - including driving on muddy agricultural roads.
In conclusion, this ruling reflects a balanced approach that protects the rights of insured parties, while imposing clear obligations on insurance companies regarding the drafting of rejection letters, interpretation of exclusions, and recognition of the nature of risks associated with specialized types of vehicles.
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