I Have A New Car – What Insurance Do I Need?

Buying a new car is exciting – all shiny new with that fresh smell and all the latest tech and safety features. Before you take your new car home, there are a few logistics to consider, like what kind of car insurance do you need?

Do I Need Insurance Before Buying A Car?

Car insurance in Israel is legally required. 

All drivers are required to be insured on the vehicle they are driving. Driving without insurance is a criminal offense and first-time offenders can be fined tens of thousands of shekels. If you are charged with a road offense such as speeding, holding a cellphone while driving, or driving under the influence while driving without insurance, the penalties will be even more severe. Repeat offenders risk losing their license and even a potential short prison sentence. In addition, if you are involved in an accident without insurance, it is your responsibility to financially cover all property damage. If you are at fault, you will also be required to cover all property expenses, as well as any potential lawyer and court fees involved.

There are different levels of car insurance, and in Israel, maximum coverage is not required. The legal requirement, the Teudat Chova, requires all car owners to have the basic level of insurance. Basic insurance, Bituach Chova, also called compulsory insurance, covers only personal injuries. It is illegal to drive a car without Bituach Chova.=

Each car owner is covered by his insurance, regardless of fault in the case of an accident. Passengers and pedestrians involved in an accident are also covered under this insurance. If there is another vehicle involved in the accident, the passengers of that vehicle are not covered, even if they are not at fault. They are also required to have their own Bituach Chova.

What Other Car Insurance Should I Consider?

Comprehensive Insurance, Bituach Makif, covers damage to your vehicle and other vehicles or property if you are at fault. Comprehensive insurance also covers theft, vandalism, fire, and explosions. Make sure to ask if your policy also includes earthquakes, riots, and other potential causes of damage.  

Tzad Gimmel, 3rd Party Insurance, only covers damage to a third party’s property. Generally, this insurance isn’t recommended with a new car and only makes sense if you have a car with low market value. 

Both comprehensive and 3rd party insurances have a maximum payout, which you should clarify when signing on a new policy. 

Getting Proof Of Insurance For A New Car And How To Update Your Insurance When Buying A New Car 

If you are buying a new car from a dealership, they require proof of insurance before you leave the lot with your car. Generally, you can set up insurance quickly and get new insurance within 24 hours or less.

If you currently have car insurance, you need to notify your provider that you are buying a new car. Once you provide the details of the car you are buying, your new rates will be calculated. Depending on the value of the new car, your premium may increase or decrease. It is important to avoid driving uninsured and not to have a gap in coverage, as this may consider you to be a higher risk and your quote for your new car to be higher. 

Purchasing car insurance for a new car is pretty much the same as for a used or older car, but you may want to consider extra coverage to protect your investment. You can add your new car to an existing car insurance policy, or if you don’t already have insurance, you can take out a new policy that begins the day you take home your new car. 

Look For A Car Insurance Policy That Suits You

If you are thinking about buying a new car, you also need to be thinking about your specific insurance needs. You need to purchase an insurance plan before buying a new car to ensure you have enough coverage.

Once we understand the tiers of car insurance and what type of coverage each provides, we can consider which car insurance is worthwhile to your specific situation. The car insurance policy of a veteran driver and a single user of a car will be completely different from that of a household with multiple vehicles and new drivers. 

Is Insurance Higher For New Cars?

Newer cars may be more expensive to insure because their replacement value is higher. As cars age and depreciate in value, insurance rates often decrease. Premiums are more complicated and determined by the coverages in your policy, how much coverage you have, and the make, model, and year of your car, among other more individual factors. Generally, the more coverage you have or the higher your coverage limits, the higher the premium. Additionally, certain types of cars cost more to insure than others. 

Most Israeli drivers choose to add comprehensive auto insurance, especially with a new car, even though it is more expensive. Comprehensive insurance covers for damage to a vehicle caused by theft, accident, fire damage, and as a result of natural disasters.If you are considering buying a new car, contact us today to discuss your policy options.