Car Insurance: Understanding What's Required, What's Advisable, and What You Really Bought
Car Insurance is designed to protect you against bodily injury, property damage, and financial loss resulting from an accident, theft, or other events—but not every type of Insurance provides the same protection. On this page, we will examine the differences between compulsory, third-party, and comprehensive Insurance, understand what affects the price, and identify the coverages and terms that are important to check before purchasing or renewing a policy.
- Reading time
- 6 minutes
- Last updated
Why This Insurance Matters
Car insurance is one of the most common types of insurance in Israel—and for good reason. Part of it is required by law, while part is intended to protect you from major financial loss in the event of an accident, theft, or damage to someone else's property. In this chapter, we will clarify the three types of insurance and explain how to balance a low price with quality coverage.
The Three Types of Insurance:
Compulsory Insurance
Covers only bodily injury to the driver, passengers, or pedestrians in the event of an accident.
Third-Party Insurance
Covers damage you cause to someone else's property (another vehicle, a fence, a store, etc.). It does not cover damage to your own vehicle.
Who is it suitable for? Mainly older, low-value vehicles, for which it is not worthwhile to pay a high Premium for comprehensive insurance.
Comprehensive Insurance
Includes third-party insurance and adds protection for your vehicle in cases of accident, theft, fire, vandalism, or natural damage.
Who is it suitable for? New vehicles or vehicles of significant value that you cannot afford to lose.
What Affects the Insurance Price?
The insurance company assesses your risk. The higher the risk, the higher the price (Premium).
- Drivers: Age (a young or new driver significantly increases the price) and insurance history (claims in the past 3 years).
- Vehicle: Model, year of manufacture, engine capacity, and the cost of parts at the garage.
- Deductible: The more you agree to pay in the event of damage, the lower the monthly price.
Additional Extensions and Coverage
Car insurance can be expanded with additional coverage:
Broken Windows and Mirrors
Repairs at no additional cost if a stone hits the windshield or as a result of vandalism.
Tip: Check whether the coverage also includes side mirrors and whether repairs must be performed by a specific provider.
Roadside Assistance and Towing
Towing and recovery in the event of a breakdown or accident, battery or tire replacement, and a replacement vehicle in certain cases.
Tip: Check how many days you are entitled to a replacement vehicle and what the towing limitations are.
Coverage for a Young or Occasional Driver
If a young driver or an additional driver uses the vehicle, it is important to ensure that this is specified in the policy.
Tip: You can purchase temporary coverage (by day or hour) instead of adding a permanent young driver.
When to File an Insurance Claim (and When Perhaps Not To)
Not every scratch justifies a claim. Filing an insurance claim leaves a “mark” on your insurance history for 3 years, which will increase the price at the next renewal.
Before Filing an Insurance Claim, Check:
- Amount of damage: If the repair costs 2,000 NIS and your Deductible is 1,500 NIS, it may be better to pay out of pocket.
- Loss of no-claims discount: One claim can make insurance more expensive by hundreds or thousands of shekels in the coming years.
How Do You Buy Car Insurance Properly?
Buying insurance is not just a matter of “paying and that's it.”
To make sure you have coverage when you need it:
- Define your needs: Decide in advance what suits your vehicle—compulsory insurance only (for a very old vehicle), third-party, or comprehensive.
- Choose a Deductible: Decide how much you can pay out of pocket in the event of an accident. The higher this amount, the lower the monthly insurance price.
- Choose extensions: Identify your “must-haves” (towing, windows, replacement vehicle).
- Compare offers: Do not settle for one offer. Compare at least 3 companies.
When comparing, do not look only at the price. Also check:
- Exclusions: What does the policy not cover?
- Coverage limits: What is the maximum amount the company will pay to a third party?
- Service terms: How quickly do they respond, and how is the claims process handled?
Common Mistakes (and What to Learn from Them)
- Choosing insurance based only on price: A policy that is too cheap may prove insufficient precisely when you need it.
- Buying coverage “blindly”: Make sure you understand what you are paying for (for example, whether towing services also include a flat tire).
- Surprises after an accident: Do not wait for an accident to discover that your coverage does not include natural damage or specific securityA general term for a tradable financial asset (such as a share, bond, or unit in a fund) that represents a right to an asset or to profits. systems.
- Filing a claim for every scratch: Remember, maintaining a clean claims history is your best tool for reducing the price in the coming years.
Capital Market Authority Compulsory Insurance Calculator—Do Not Buy Before Comparing
Before renewing or purchasing compulsory insurance, it is highly recommended to use the Capital Market Authority's Compulsory Insurance Calculator. The calculator allows you to compare compulsory insurance offers from different insurance companies based on the characteristics of the drivers and vehicle, giving you a clear picture of market prices. Since compulsory insurance is a standardized product in terms of the coverage set by law, the differences between companies are mainly reflected in price and service.
Frequently asked questions
Must I Buy Comprehensive Insurance from the Same Company as Compulsory Insurance?
No. You can split your insurance between different companies if it lowers the price, although it is usually more convenient to keep everything in one place.
What Happens if a Young Driver Drove the Vehicle Without Coverage and There Was an Accident?
Warning: The insurance company may refuse payment entirely. Always make sure the person behind the wheel is specified in the policy.
How Do You Get the Cheapest Price?
Comparison. Use the Capital Market Authority's Insurance Calculator to compare compulsory insurance, and platforms such as Wobi or Bestie to compare third-party and comprehensive insurance. Then present your current company with a cheaper offer you received.
In summary,
Car Insurance consists of three main types: compulsory Insurance, third-party Insurance, and comprehensive Insurance. Each covers a different type of risk.
The differences between policies are sometimes found in the small details—the Deductible, coverage limits, and extensions included in the policy. Understanding the Deductible and maintaining a claims-free record can save you significant amounts of money over time.