Question and Answer: Should I submit a claim to the insurance company below the deductible?
Mar 4, 2025
Question :
Does damage that is lower than the deductible justify contacting the insurance company and activating a policy?
Question : Does damage that is lower than the deductible justify contacting the insurance company and activating a policy?
answer
The item before you was written together with attorney Ben Asban, owner and founder of a law firm, with extensive experience in accompanying many clients in the construction industry in insurance and tort law matters.
The answer to the question is divided into two parts: whether we're dealing with property damage or bodily injury. This is because when it comes to property damage, the quick answer would be "no," and if we're dealing with bodily injury, it's a completely different story.
Let's start with the "easy" matter - in the case of property damage where it's clear that the amount will be low, we can say that usually there's no point in transferring the claim to the insurer.
Even before we talk about the financial matter for which we've gathered, the very registration of a claim has far-reaching consequences for the insured. Given the "atmosphere" that currently dominates the construction insurance industry in Israel, the cleaner the insured's claims status, the better it will be. So if the claim amount is lower than the deductible, there's no logic for anyone other than the contractor/developer to handle the claim, since either way the result will be at their full expense.
This doesn't mean we recommend avoiding justified insurance claims - absolutely not. We simply suggest "carefully considering" filing claims for amounts below the deductible, or even those exceeding them by insignificant amounts that the contractor can absorb, given the current situation in the insurance market, where as mentioned, it's preferable to avoid unnecessary claims.
Why? Due to insurance companies' approach toward policyholders in the construction industry. In 2019, overseas reinsurers (which are international insurance companies that back Israeli insurance companies) decided to change their approach regarding construction insurance globally. Terms were tightened, deductibles were raised, coverages were removed, and difficulties were created even in areas that were almost "a matter of course" in the past (such as policy extensions or changes to policies during operation). In complex and risky projects, it became difficult to obtain insurance (such as preservation projects, for example).
Attorney Ben Asban emphasizes that the tendency of insurance company representatives is to settle claims for low amounts, often when this doesn't serve the insured's interest (!). In other words, there's a kind of situation where "the cat is guarding the cream" due to conflict of interests. "On one hand, the insured's desire is to pay minimum, and on the other hand, the insurer's desire is for quick settlement, particularly when it's not at their expense," he explains.
Bodily injury? We're in a completely different event. Particularly if it involves a minor, but this applies to victims of all ages.
Compensation rulings in Israel for bodily injuries are influenced by different heads of damage. Often, even damages that appear "minor" at first glance can reach dramatic amounts. Especially when the victim is accompanied by professional and skilled attorneys who strive to protect their client and achieve the best possible outcome for them and their family members.
"The examples are numerous," emphasizes attorney Asban, "starting from delayed orthopedic injuries discovered in the spine, through psychological complaints, and ending in various directions. Things worsen when the injury adversely affects earning capacity and the victim is entitled to compensation for future loss of earning capacity."
Insured parties who don't activate the policy claiming that bodily injuries are low or even disputed ("whether the case will be accepted at all"), may find themselves facing cases involving enormous sums.
Attorney Ben Asban emphasizes that the problem in such cases could worsen sevenfold, as the insurance company could then claim lack of coverage. For example, due to lack of cooperation between the insured and the insurance company in the case, failure to report the incident on time, and sometimes even admission of liability given in good faith.
Therefore, if the contractor/developer handles the case independently without involving the insurance company, they may find themselves without coverage facing a significant case, based on the claim of "case management without authorization." Hence, even if the insured decides not to activate the policy, it's very important to obtain explicit prior approval from the insurance company (in advance and not retroactively!).
A small anecdote to conclude: The day is not far when there will be no choice but self-management, given the enormous deductible amounts that keep rising, exactly as happens today in most municipalities in the country, and attorney Asban notes this as part of his role as deputy mayor of Kiryat Bialik.
The item before you was written together with attorney Ben Asban, owner and founder of a law firm, with extensive experience in accompanying many clients in the construction industry in insurance and tort law matters.
The answer to the question is divided into two parts: whether we're dealing with property damage or bodily injury. This is because when it comes to property damage, the quick answer would be "no," and if we're dealing with bodily injury, it's a completely different story.
Let's start with the "easy" matter - in the case of property damage where it's clear that the amount will be low, we can say that usually there's no point in transferring the claim to the insurer.
Even before we talk about the financial matter for which we've gathered, the very registration of a claim has far-reaching consequences for the insured. Given the "atmosphere" that currently dominates the construction insurance industry in Israel, the cleaner the insured's claims status, the better it will be. So if the claim amount is lower than the deductible, there's no logic for anyone other than the contractor/developer to handle the claim, since either way the result will be at their full expense.
This doesn't mean we recommend avoiding justified insurance claims - absolutely not. We simply suggest "carefully considering" filing claims for amounts below the deductible, or even those exceeding them by insignificant amounts that the contractor can absorb, given the current situation in the insurance market, where as mentioned, it's preferable to avoid unnecessary claims.
Why? Due to insurance companies' approach toward policyholders in the construction industry. In 2019, overseas reinsurers (which are international insurance companies that back Israeli insurance companies) decided to change their approach regarding construction insurance globally. Terms were tightened, deductibles were raised, coverages were removed, and difficulties were created even in areas that were almost "a matter of course" in the past (such as policy extensions or changes to policies during operation). In complex and risky projects, it became difficult to obtain insurance (such as preservation projects, for example).
Attorney Ben Asban emphasizes that the tendency of insurance company representatives is to settle claims for low amounts, often when this doesn't serve the insured's interest (!). In other words, there's a kind of situation where "the cat is guarding the cream" due to conflict of interests. "On one hand, the insured's desire is to pay minimum, and on the other hand, the insurer's desire is for quick settlement, particularly when it's not at their expense," he explains.
Bodily injury? We're in a completely different event. Particularly if it involves a minor, but this applies to victims of all ages.
Compensation rulings in Israel for bodily injuries are influenced by different heads of damage. Often, even damages that appear "minor" at first glance can reach dramatic amounts. Especially when the victim is accompanied by professional and skilled attorneys who strive to protect their client and achieve the best possible outcome for them and their family members.
"The examples are numerous," emphasizes attorney Asban, "starting from delayed orthopedic injuries discovered in the spine, through psychological complaints, and ending in various directions. Things worsen when the injury adversely affects earning capacity and the victim is entitled to compensation for future loss of earning capacity."
Insured parties who don't activate the policy claiming that bodily injuries are low or even disputed ("whether the case will be accepted at all"), may find themselves facing cases involving enormous sums.
Attorney Ben Asban emphasizes that the problem in such cases could worsen sevenfold, as the insurance company could then claim lack of coverage. For example, due to lack of cooperation between the insured and the insurance company in the case, failure to report the incident on time, and sometimes even admission of liability given in good faith.
Therefore, if the contractor/developer handles the case independently without involving the insurance company, they may find themselves without coverage facing a significant case, based on the claim of "case management without authorization." Hence, even if the insured decides not to activate the policy, it's very important to obtain explicit prior approval from the insurance company (in advance and not retroactively!).
A small anecdote to conclude: The day is not far when there will be no choice but self-management, given the enormous deductible amounts that keep rising, exactly as happens today in most municipalities in the country, and attorney Asban notes this as part of his role as deputy mayor of Kiryat Bialik.
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