Israeli motorists can look forward to a dramatic reduction in insurance rates following the unveiling of a plan to rein in exorbitant fees for compulsory coverage, The Jerusalem Post reported.
Finance Minister Moshe Kahlon and Supervisor of Capital Markets Dorit Salinger announced a plan to cut compulsory auto-insurance rates by as much as 65 percent.
“The reform will end the exploitation of the public in the compulsory insurance market,” Kahlon said.
They are taking aim at “Pool,” a corporation owned jointly by Israel’s insurance companies that was set up to make coverage available to high-risk drivers who could not obtain insurance in the private market.
The plan will affect a huge sector. Officials estimate that 850,000 drivers who rely on Pool insurance — about half of all private vehicle drivers — will qualify for discounts.
Kahlon said the car-insurance market turns over some NIS 5 billion a year and clears a profit of around 20 percent.
The Finance Ministry estimated that the average cost of Pool insurance would fall from NIS 3,771 to NIS 3,091.
The new regulations also require that drivers with the same risk assessment are offered the same rate. Drivers may save from 10 percent to 50 percent on insurance costs. Drivers who use early-warning technology will be eligible for an additional discount of as much as 15 percent.
The plan is scheduled to be implemented starting in 2016.