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