How Does Home Insurance in Israel Work?

Home insurance in Israel is a financial safety net that protects you from unexpected damage or loss to your home and belongings. Whether you own or rent, this insurance can cover both the structure of the home and the contents inside. In the event of fire, theft, flooding, or other damage, home insurance helps you recover financially, rather than absorbing the full cost yourself. You pay an annual premium to a private insurer, who in turn agrees to compensate you for covered losses according to the terms of your policy.

What types of home insurance coverage are available?

Home insurance in Israel can include several types of coverage, each one addressing a different kind of risk.

1. Structural Insurance (Building Insurance): Covers damage to the physical structure of your home, such as walls, floors, roof, plumbing, and built-in fixtures. This is typically required by banks as part of the mortgage approval process.
2. Contents Insurance: Covers your personal belongings, including furniture, appliances, electronics, clothing, and valuables. This is optional, but highly recommended, especially for renters or those with high-value items.
3. Third-Party Liability Insurance: Covers injury or property damage caused to others in or around your home. For example, if a tenant or guest slips on your stairs or if a leak in your apartment damages your neighbor’s home. This is often included in structural or contents policies, but may also be purchased separately.
4. Personal Liability Insurance (Tenant Liability): Especially important for renters, this covers you if you accidentally damage the rented property or neighboring units—for instance, from a fire or flooding caused by a malfunctioning appliance.
5. Life Insurance: If you’re taking out a mortgage in Israel, the bank will usually require life insurance. The life insurance policy ensures the mortgage will be repaid if something happens to you (the borrower). While it’s not part of your home insurance policy, all types of coverage are often arranged at the same time, sometimes through the same insurance company.

Are there different types of home insurance policies?

Yes. You can often choose between basic policies, which cover common risks like fire, theft, and water damage, and extended policies, which may include accidental damage, loss outside the home, and specific valuable items. You can compare policies through brokers or online platforms.

Other optional add-ons to your home insurance policy may include earthquake insurance and loss of rent or temporary housing coverage in case your home becomes uninhabitable.

How do home insurance companies work in Israel?

You purchase home insurance in Israel through a private insurance company or insurance broker. The cost of your policy depends on:

• The value of your home or belongings
• Location and risk factors (e.g., proximity to conflict zones or high-crime areas)
• The level and type of coverage you choose
• Your insurance history (e.g., past claims)

Most policies are renewed annually, and claims are handled directly through your insurer. In many cases, you’ll need to pay a deductible (hishtatfut atzmit) when filing a claim.

What is a property appraisal and when is it required?

If you’re taking out a mortgage or insuring a high-value home or belongings, your insurance company may send an appraiser (shammai) to assess the value of the structure or contents. This ensures that your policy accurately reflects the property’s value and prevents underinsurance or overpayment.

Appraisers may also be involved during the claims process, especially in cases of major damage or theft, to verify the loss and determine appropriate compensation.