Car insurance rates, or more specifically comprehensive coverage including damage and theft, have risen 30% on average over the past year, according to the Wobi insurance price comparison website, well above the annual inflation rate of 5%.
Wobi says that the dominant reason for the hike in insurance prices is a sharp rise in car thefts. Wobi says thefts are currently costing the insurance companies NIS 1.3 billion per year, or over NIS 100 million per month.
According to Pointer Telocation, which offers vehicle location solutions, car thefts rose 140% in the first three months of 2023 compared with the corresponding period of last year.
Another factor that has increased insurance rates is the higher cost of spare parts because of Chinese lockdowns, supply chain problems and the depreciation of the shekel.
Compulsory insurance rates, for injury, which are controlled by a government regulator, have risen 10% over the past year, also above the rate of inflation.
Wobi recommends that car owners research more thoroughly the different prices for insurance on offer in order to help moderate price increases.
Shai Sadeh, chairman of the Insurance Agents Association’s general insurance committee said, “Only competition will bring change. If there was genuine competition between 50 companies and not 14 then the prices would fall. The market is currently controlled by a small number of large players and we are the only country in the OECD in which foreign insurance companies don’t operate. In addition, the Ministry of Transport must deal with competition in the spare parts sector through personal and indirect importing.”
Published by Globes, Israel business news – en.globes.co.il – on April 19, 2023.
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