Insurance coverage due to war or hostilities

Oct 19, 2023

By: Adv. Shakma Levy Ezra

Unfortunately, in the State of Israel, significant terrorist events occur frequently, causing widespread damage across the country.

The default position in standard insurance policies marketed in Israel is that war and terrorism events are not covered. On the other hand, the state provides compensation to the affected parties as follows:

Buildings are automatically insured by the state under the Property Tax and Compensation Fund Law, 1961.
Apartment contents, except for valuables, are covered under the Property Tax and Compensation Fund Regulations (Compensation Payments) (Household Items), 1973.

A quick look at the compensation tables for contents shows that the amounts are not high and, in most cases, will not be sufficient.

Following a significant terrorism or war event—as we are currently experiencing—and given the large-scale damages, it is advisable to manage risks properly and plan ahead so that, God willing, we will be fully prepared for the next emergency.

From: Attorney Shikma Levi Ezra

In the State of Israel, to our great regret, numerous and significant terrorist incidents frequently occur, causing extensive damage throughout the country.

The default in standard insurance policies marketed in Israel by insurance companies is that events of war and terrorism are not covered by insurance. On the other hand, the state compensates the injured party in the following manner:

The building is automatically insured by the state according to the Property Tax and Compensation Fund Law 1961-5721.

The contents of the apartment, with the exception of valuables, are covered according to the Property Tax and Compensation Fund (Payment of Compensation) (Household Goods) Regulations, 5733-1973 . From a quick look at the compensation tables for the contents , it can be seen that the amounts are not high and will usually not be sufficient.

After a significant terrorist or war event, such as we are experiencing these days, and in light of the large amount of damage, it is appropriate that we manage risks correctly and consider our steps forward, so that on the next day of the command, we will be prepared accordingly.

There are two options for insurance against damage caused by terrorism or war:

1. Through home insurance / insurance companies - you must proactively contact the insurance company to purchase an extension for such future events, when you must calculate the maximum amount of compensation from property tax and what additional amount for valuables and contents you wish to supplement.
It is recommended to make sure that the extension offered by the insurance company does indeed include compensation for both terrorist and war damages.

2. By purchasing property tax insurance - in cases where the value of the contents is higher than the amounts specified in the Property Tax Law - additional property tax insurance called "Property Tax Insurance" can be purchased, but up to a maximum of NIS 919,306.

The way to do this is very simple and is done by filling out a special form at the Income Tax Commission, which will detail the additional value to be covered and the payment for it will be 0.3% of the additional value. Link .

The State of Israel has known many terrorist incidents - and these days we are experiencing a difficult event that led to war, so we must be prepared accordingly and ensure insurance coverage through one of the methods we have outlined for you.

Take responsibility and don't wait!

May we know good and peaceful days....!

1. Through Home Insurance / Insurance Companies – You should proactively contact your insurance company to purchase an extension covering such future events. You need to calculate the maximum compensation allowed under property tax law and determine the additional amount you wish to cover for valuables and household contents. It is recommended to ensure that the extension offered by the insurance company includes coverage for both terrorism and war-related damage.

2. By Purchasing Optional Insurance via Property Tax – In cases where the value of your contents exceeds the amounts set by property tax law, you can purchase additional coverage under property tax called “optional insurance”, but only up to a limit of ₪919,306.

The process is very simple and involves filling out a special form at the Income Tax Authority, specifying the additional coverage value. The payment for this coverage is 0.3% of the additional value. [Link]

Israel has experienced numerous terrorist events, and currently, we are facing a severe event that has led to war. Therefore, it is important to be prepared and ensure insurance coverage through one of the methods outlined above.

Take responsibility and do not wait!

Let us hope for peaceful and safe days ahead…!