What you need to know about imported cars and insurance
By Danny Newman, Branch Manager – Beit Shemesh, Goldfus Insurance
In recent years many Olim Chadashim have found it cheaper to import their cars from their country of origin using Aliyah benefits. Others have chosen to important cars irrespective of the benefits, due to the limited range of cars available in Israel.
Just as there is a lot of bureaucracy to be dealt with when it comes to registering a personal import to Israel, the insurance process is no different. There are a few key points that should be considered before making the decision to import your car. It is worthwhile speaking to people who have done it, so an understanding of the insurance process can be gained and potential pitfalls avoided.
- How to obtain insurance once the car arrives
There are different components of car insurance that need to be considered.
Bituach Chova (Compulsory Insurance), is the legally required insurance that covers bodily injury only. It covers injury to yourself, the passengers in your car and any pedestrians your car may hit. Before being able to legally drive the car, the Bituach Chova needs to be paid and issued. The Bituach Chova can either be put in place as soon as you know the VIN or Chassis number (known in Hebrew as the Mispar Shilda) or once you receive the Israeli car registration number (known in Hebrew as the Mispar Rishui). Once the car registration documents for Israel, such as the Rishayon Rechev, has been received, any missing information can be updated on the Bituach Chova certificate.
Bituach Tzad Gimmel (3rd Party Liability Insurance), covering damage to a 3rd party vehicle or property, can be implemented immediately together with the Bituach Chova.
Bitach Makif (Comprehensive Insurance) can only be put in place once an appraisal report from Levi Yizchak, the authorized car appraisal company in Israel, has been issued. Even then, it can take a few days to receive a competitive quote. It should be noted that due to the relatively low number of foreign imports and actuarial data in Israel, premiums for certain imported cars can often be higher than the Israeli equivalent.
A large proportion of imported cars have a high book value. As such, the Israeli insurance companies may require certain security devices to be installed. The insurance companies usually give a short grace period in order to install the required system and will request proof of the installation. Tracking/GPS security devices are a common requirement necessitating an additional monthly cost to the tracking company for the owner of the vehicle.
- Windshield cover
Car manufacturers design the same model of car differently according to the region or country that they are selling it in. Often there are subtle differences in the dimensions of the car which can complicate things in the event that a personal imported car needs to be repaired in Israel. A common complication is repairing a windshield, since the auto glass repairmen will likely only carry replacement windshields for cars that are sold in Israel. As a result, the insurance companies do not provide cover for replacement windshields on imported cars, which is often a standard feature in policies for “regular” cars in Israel. This is an important factor to remember when considering the idea of bringing your car on Aliyah, as it may be an out-of-pocket expense for the owner in the event of damage to the windshield.
- Carfax Report – Details and history of the car
In order to register a personal imported car with the Licensing Authority in Israel and take out insurance, it is essential to provide the exact details of the car. The simplest way to collect this information is to provide the relevant party with the original records and documentation of the car. Alternatively, you may submit a report from Carfax (or equivalent) which provides detailed information about the history, make and model of the car according to the VIN/Chassis number.
- Updated Levi Yitzchak report every 2 years
When selling a car or in the event of an insurance claim, the book price (Mechir Mechiron) is referred to. The standard book price is that which is provided by Levi Yitzchak. The Levi Yitzchak Mechiron is constantly updated in order to include new cars as well as update the depreciated value of older cars. Since personal import cars are not registered in the Mechiron, the owner is obligated, for insurance purposes, to provide an updated report from Levi Yitzchak every two years. By doing so, there will be little room for argument between the insurance company and the owner, about the current value of the car, resulting in an accurate claim decision.
- Making a claim
When it comes to personal imported cars, the claims process can be more complicated than a regular claim. For claims related to cars that are commonly found in Israel, the loss adjuster knows the cost of the labour and replacement parts and as such can assess the extent of the damage or cost to the insurance company relatively simply. In the event of a claim on a personal import however, the replacement parts often need to be ordered from abroad as well as extra expenses for shipping and customs fees. At that point, the insurance company needs to assess whether the overall cost to repair the car will render the claim a total loss – changing the scenario from a minor claim to a total loss incident. As a result, in some instances the claims process for an imported car can take several months.
- Replacement car
It is important to keep in mind that insurance companies will only provide a replacement car for a limited number of days according to the terms and conditions of the policy. As claims on personal imported cars can take several months, one could be left without cover for a replacement car for the duration of the claim. As such it is important to consider this additional expense, as car rentals can be quite expensive and won’t be compensated for by the insurance company in any scenario.
- Valid driver’s license in Israel
As with all car insurance policies, it is important that the drivers of the car hold a valid driver’s license in Israel. At present, Israel recognises a foreign license for 1 year from the date on entry into Israel. Olim Chadashim must convert their driver’s license to an Israeli license before being able to use the customs benefits to bring a personal imported car.
Importing a car to Israel is not a simple process. It is important to consider all the insurance elements to avoid any surprises in the event of a claim. Understanding these crucial points will assist you in managing your expectations regarding the insurance policy and your overall decision when it comes to importing a car.
For more information on car insurance or Goldfus Insurance contact us today!