The cost of living: a sharp real increase in car insurance rates

When the price of toothpaste goes up by 5%, there are calls for a consumer boycott, but when the car insurance that each of us pays becomes sharply more expensive (the insurance companies prefer to call it "reduction of discounts", we remain silent. Why is this happening and what can be done?

Liat Ron

31/07/2022

Sunday, July 31, 2022, 11:11 am Updated: 11:26 am

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Companies have no ability to raise rates.

What to do?

Reducing (a lot!) the discounts (photo: ShutterStock)

In the middle of last week, Tamar from Central Ha'aretz remembered that she needed to renew her car insurance.

This is an average family car, which has been on the road for a few years.

She called her insurance agency and was sure she would pay less, because of the attached company car she got.

"The number of kilometers in the family car was supposed to decrease significantly," she says, "and according to our calculation and due to the lack of lawsuits, the price was supposed to decrease between 15% and 20%."

To Tamar's astonishment, not only did the insurance price not drop significantly, it jumped up: "The agent told me that we were supposed to add NIS 1,300 to the third-party insurance, which means another 30%. I was in the market and argued with him. In the end, they did me a favor and left the price as it is that I paid last year. When I tried to understand which insurance inputs went up, he answered me that the whole market went up and everything got more expensive."

When the pasta went up by the shekel, social networks exploded with the rage of surfers.

For some reason, the average 20% increase in the price of car insurance, a regular and necessary expense for a large part of the Israeli public, somehow managed to pass under the radar, even though its effect on family spending is greater than a monthly expenditure on pasta.

Repair in the garage (illustration).

Those who claim that the price has risen justifiably, point to the increase in the cost of spare parts, the shortage of chips and also to an increase in thefts (Photo: ShutterStock)

A justified increase or taking advantage of an opportunity?

A senior official in the car insurance market tells "Walla" that when everything around goes up, the car insurance also goes up, even if the reason is not always justified.

"An insurance company cannot raise the price just like that, it must convincingly prove that the maximum price needs to be raised. I can say with certainty that the insurance companies did not reach the maximum price because of the great competition, but they reduce or completely cancel the discounts they gave. The insurance agent has the ability to give another discount and they stopped giving it."

, claims that the increase in car insurance prices is completely justified.

"There is the famous microchip crisis that causes a shortage of new vehicles, which creates a chain reaction: used vehicles are not sold and new vehicles are not bought and there is an increase in accidents, which creates a shortage of spare parts and when spare parts are lacking - there are more car thefts.

"During the Corona period there was a delay in the licensing tests and suddenly the traffic jam was released and in one fell swoop tens of thousands of young drivers joined driving on the roads and correspondingly there was a 20% increase in traffic accidents at the end of the Corona and also compared to the period before. Add to all this the inflation and the increase in the price of spare parts, the employment crisis in garages, the global fuel crisis , all this will make the insurance more expensive by 15%".

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Served on behalf of B Cure Laser

Has car insurance become more expensive?

Don't be lazy to do a market survey and you might be surprised by the gaps (Photo: ShutterStock)

Not an increase in price, but a "reduction of discounts"

No one is saying that he is raising the price, but everyone is using the washed-up term "reduction of discounts".

"Masauda Mesderot doesn't care what it's called. The mandatory insurance has also gone up, because the health insurance funds have taken the bodily accidents out of themselves and are outsourcing them to the insurance companies."

"It is completely realistic. In the last decade, we hardly dealt with car thefts, so much so that relatively expensive cars were not required to put tracking systems. Today there is a repeated demand for protecting cars. By the way, the thefts are not only at the seam, but also in the center of the country. What else needs to be taken In the account are the bad business results of the insurance companies. The first half of 2022 was a loss and if before there was some 'meat' for the companies from the profits from the capital market, today there is nowhere to balance the losses."

so what are we doing?

The senior official in the insurance market has some golden tips for lowering prices: "During the Corona period, insurance routes were approved based on kilometers, you can check if they are cheaper, and in any case,

. The direct insurance companies, such as 'Libra', 'Vishor' and 'Direct Insurance' maintain good prices even when the business results of the traditional companies are bad."

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