Making Aliyah to Israel? – Here are Some Additional Useful Tips for You – How to Deal with Insurance Companies
Article by Yael Harari
Elaine, a new Olah from Switzerland, came to live in Raanana with her family. The family decided to rent a house as a “try-out” period at the end of which they would decide how to proceed for a more permanent arrangement.Shortly thereafter a suitable house was found, a lease contract was signed with an honest landlord and the family began their settling-in stage in Israel. A term of their house leasing contract obligated the family to insure the house with a reputable insurance company.
In order to comply with their contact, Elaine contacted a random insurance broker and requested a price quote for insuring the house as per the contract’s terms. Several days later, with her permission, the agent sent an appraiser to her house, who produced a detailed list and assessed the value of the various items in the house for insurance purposes, on the basis of which, the agent provided Elaine with the insurance price estimate.
Subsequently, Elaine efficiently contacted an additional insurance broker and requested another price quote for insuring the house, based on the copy of the survey report. Since this agent offered a cheaper price for the same coverage, she decided to sign an insurance contract the insurance company he represented, rather than with the first agent she approached.
Several weeks later, Elaine was surprised to receive registered mail from the first insurance broker stating she owed NIS 2,900 for her house insurance policy, demanding Elaine settle the debt immediately. A quick inquiry revealed that the first insurance broker Elaine approached, wrongfully issued an insurance policy, without Elaine’s consent which resulted in the insurance company demanding payment. Elaine contacted our company feeling helpless and unsure what to do and how to proceed. Without delay we drafted a letter on behalf of Elaine, clarifying that she specifically asked for a price quote and never intended for a policy to be issued. Additionally, since the insurance company would have demanded Elaine at least pay the appraiser’s costs as is the custom, we managed to reach a settlement with the second insurance company Elaine eventually signed with, that they bear the appraiser’s costs. As a result, Elaine’s family paid for only one policy, with the company of their choice.
Tips for Home Insurance Like most service providers, costs of insurance varies between companies, make sure you shop around before deciding on an insurance policy.
In order to take out a home insurance policy, you can contact the insurance companies directly or use an insurance broker. If you contact the insurance companies directly it will be cheaper, but you will have no “personal representative”. Rather, you will have to speak to a different representative each time you call the company.
There are 2 types of coverage in home insurance policies: structure insurance and content insurance (and a third option, which is one policy that includes both). Structure policy typically covers the home structure i.e. plumbing, tiles, property foundations, heaters, permanent fixtures such as windows, doors, kitchen cabinets etc. Content policy typically covers the contents inside the property insured such as furniture, plants (inside the dwelling), pictures etc. The items are not insured if they are not held within the structure itself, so garden furniture and equipment, jacuzzis on roofs or in the garden, bicycles in the shed etc. are not covered.
When “shopping around” for a good deal – do not provide payment details. Clearly inform any potential insurance broker you are interested in price quotes only, prior to making your final decision about the insurance broker and company you want to contract with.
Often, when an insurance broker sends an appraiser to assess the value of the property contents and structure for insurance purposes, he does so on behalf of an insurance company which in return, undertakes to pay the appraiser’s costs. However, if subsequent to his report you decide to insure the house with a different company, you may be requested to pay the appraiser’s expenses yourself or reimburse the insurance company clarify the payment to the appraiser issue with the insurance broker before you agree to a survey, make sure you will not be obligated to pay for the survey should you have a change of heart and decide to contract with a different insurance broker or company.
Ask the insurance broker to provide you with detailed written explanations of the coverage offered, preferably a copy of the policy in English (available in some insurance companies) or a detailed translation in a language you fully understand.
Prior to signing an insurance policy: 1) Carefully read the terms of the policy and the extent of coverage for each risk. Make sure the insured sum for each risk covered (the sum the insurance company is expected to pay) as well as the excess sum (the cost you are expected to pay yourself if an insurance event occurs), is clearly stated in the policy next to each risk. 2) Make sure that any promises given by the insurance broker are written in the policy, especially if these promises for coverage are personal and not a standard term in the policy there is no value to any oral promises the agent gives you, unless they are specifically contained in the policy (if it is not written in the policy, it does not exists). 3) Ensure you comply with the house protection specifications as per the insurance contract terms. Some policies request special locks, alarms and security mechanisms. If you fail to comply with the policy’s terms, the insurance company may deny your claim.
Jewelry many insurance companies require expensive jewelry to be locked in a heavy safe, some policies even stipulate the safes must be screwed to the ground or a wall. The safes insurance companies usually specify as being satisfactory are very expensive, and if you are a tenant leasing the property, purchasing such a safe may not be worth the money. Moreover, permanently attaching the safe to the ground or a wall may prove to be problematic with the landlord. A cheaper alternative is to store the jewelry in your bank’s safe. However, this means the jewelry will not be insured under the home policy, but if stored at the bank, the risk for theft is drastically reduced.
When renting property ask the landlord whether he has home insurance on the property, and the extent of coverage. Many landlords have structure insurance but require tenants to insure the contents themselves. Alternatively, landlords may have both structure and content insurance but this does not take you off the hook. In the event of negligence causing damage covered by the insurance (whether structure or content), an insurance company will compensate the policy holder but retain the right (and exercise it often!) to sue for reimbursement from the negligent party. Therefore, if you are renting the property and negligently caused damage, the insurance company will pay the landlord as the policy’s beneficiary, but may then submit a claim against you for your negligence! There are several mechanisms to avoid this unpleasant situation, one of which is to ask the landlord to add you as a party to the policy. Since you are not the property owner the insurance will pay the landlord, but as a named party in the insurance, the insurance company is barred from submitting a claim against you. This is a common preventative step which does not cost the landlord anything but a phone call and does not affect him in anyway, but protects you as the tenant.
When all else fails and you feel you were wronged by the insurance company, you can turn to the Insurance Commissioner (which is called the Insurance Supervisor in Israel). The Insurance Commissioner works within the Ministry of Finance and his role includes, amongst other things, to ensure that insurance companies do not take advantage of consumers. You can reach the Insurance Supervisor by internet through the Ministry of Finance (unfortunately at present this option is only available in Hebrew), or you can fax your complaint to 02-5695352.
Yael Harari, Adv., Esq. Co-Founder of TransHomation
About the Author
Yael Harari is an attorney both in Israel and in New York. She is a co-founder of TransHomation, a small boutique style company that provides personal, customized aliyah, relocation, settling-in and ongoing-support services to newcomers in Israel (www.transhomation.com).
