When taking out a mortgage, the bank offers to provide home insurance. Is it advisable to get home insurance through the bank?

No.

The bank offers the customer taking out the mortgage to assist itself, not the customer.

The bank is concerned about a situation where something happens to interfere with its repayment of the loan. The insurance aspect is not their primary focus.

For this reason, there are two main drawbacks to getting home insurance through the bank.

1. Lack of important coverage – the bank’s policy is likely to be the most basic one available. Starting from the insurance amount, which is usually minimal (and might not suffice in extreme cases), sometimes without third-party coverage at all and other basic coverages.

Every time there’s no need for the policy, everything is fine. The problem arises when there’s a need.

We’ll expand on this later.

2. Poor handling of claims – Was there damage to your apartment? The address for the insurance company is the bank’s insurance agency… the connection with them isn’t personal. Moreover, there are many situations where you might need to negotiate with the insurance company, and it’s reasonable to assume that the bank’s agency won’t invest special effort on your behalf. On the other hand, an agent who knows you and considers you an important client will represent your interests much more effectively against the insurance companies.

I got a phone call and was told that it’s possible to reduce the premium. Should I agree, or is there some catch?

First and for most, it’s important to compare like with like. There are several components to consider in order to assess whether the offer is truly better or not.

1. Insurance Amount – meaning the maximum amount of money received in the event of an insurance claim. Sales representatives, in order to lower the policy, usually offer the minimum coverage of 5,500 ILS per square meter. Assuming your current policy’s coverage is higher – for example, 7,500 ILS per square meter – then, in fact, they are offering you 27% less. Even if the offer is cheaper, it’s like replacing your orange with a clementine.
2. Coverages – As explained above, it’s important to make sure that the representative hasn’t stripped the policy of important coverages like personal liability, self-participation deductible, and more. If you truly want a better offer, the right approach is to transfer your existing policy to the same provider and request the exact same coverages. Of course, if you want to change any coverage, specify it explicitly in your conversation with them.

What should you pay attention to when getting a home insurance policy?

1. Make sure that in the “Pipe Damages” clause, you have the option to choose your own plumber (not the insurer’s plumber). This is likely the most crucial clause in a home insurance policy. Most damages in home insurance are caused by pipe bursts. In a basic policy, the handling of such cases falls under the insurer’s responsibility. Unfortunately, we’ve witnessed many cases where insurance companies provide poor service in this regard. They prefer to handle the issue themselves to save costs, often resulting in insufficient solutions. High self-participation requirements (sometimes applied multiple times with the claim that they are different damages) are also common. At our agency, Segal Insurance & Finance, the norm is a policy with a clause for choosing your own plumber. Particularly, we have a special arrangement with a collective insurer (Clal) through which we offer clients a policy with this clause at a very low price and low self-participation.
2. Ensure that your insurance amount is up to date. The norm ls for a basic policy is to offer the lowest insurance amount, which is 5,500 ILS per square meter. You should adjust the insurance amount to your property’s construction standard. In the event of an insurance claim, does the maximum insurance amount provide sufficient coverage? If not, ask to increase the insurance amount in the policy.
3. Review the content survey. Every few years, insurance companies send an assessor to update the list of contents in your home. It’s recommended to review the list and make sure the survey is accurate. In the event of an insurance claim, the document will be decisive. An item not listed in the survey that incurs damage might not be covered. Additionally, if it’s found that the actual value of the contents is higher than what was listed, the insurance might be considered underinsured, leading to partial compensation.
4. Did you buy new jewelry or valuable items that you want to include in the insurance? Contact the agent and update them! In the event of an insurance claim, your coverage is based on the content survey. If you bought a valuable item and didn’t update the agent, that item might be at risk and might not be covered.
5. In the event of an insurance claim for property damage – fire, pipe explosion, etc. – contact the agent! Don’t attempt to handle the case independently. Follow the agent’s instructions. Leave the insurance company’s handling of the claim to the agency that represents you. 

Are there any small print details in the policy that are worth knowing? In which situations might there be no coverage?

The joke says that the insurance company will be happy to insure you against hailstones, but under one condition – that the insurance doesn’t include fire damage. It’s advisable to familiarize yourself with the situations in which the insurance company likes to deviate from the coverage and be prepared accordingly!

1. Non-compliance with insurance requirements: Each policy explicitly states the required security conditions for the insurance to be valid. If the required security conditions are not met when the insured event occurs, such as an alarm or a fence, it could endanger the insurance coverage. A simple example that people might not be aware of is bicycles. If the bicycles are placed in the yard and the gate to the house is locked, usually that’s not sufficient. There’s typically a requirement in the policy to lock the bicycles to a metal post, otherwise, they are not covered.

2. Various coverage limitations / self-participation:
a. Jewelry: In most policies, there’s a clause limiting the compensation amount for jewelry as part of the total insurance amount. The insurance company is not willing to insure or compensate for jewelry that exceeds a certain percentage of the total value.

b. Earthquake self – participation: In the case of an earthquake, there’s a self-participation clause of 10%.

c. Burst pipe participation: This could reach thousands of shekels. In “Segal Insurance and Finance Agency,” the self-participation is only 1200 shekels.

3. Rainwater or faulty sealing damage: Damage from rainwater is not covered by most policies. In rainy periods, customers often contact us about damages due to rainwater and are surprised to hear that insurance policies in all companies simply don’t cover damages caused by rainwater. Regarding sealing problems, they are generally not covered. In a basic policy with an agreement with the insurance company, there is basic coverage but it’s limited and only covers sealing issues in bathrooms.

4. Actual repair is required for full compensation: Most of the compensation amount will be deposited into your bank account even without showing invoices for the repairs. However, a certain part of the compensation (about a third) will only be given if the actual repair is performed and the invoices are presented against it.
Stolen property later recovered: According to the policy terms, if

5. stolen property is recovered after compensation, you need to return either the recovered property or the compensation received from the insurance company.

6. Work from home coverage: The basic policy also covers employees e.g. a cleaner. However, the coverage is only above national insurance. It means that only for employees for whom national insurance is paid. The coverage amount will be the difference between the court’s decision and the payment made by the national insurance (up to the insurance amount).

Which situations are not covered, but they can be covered through a policy extension (for an additional payment? 

1. Taking insured property out of the house: To apply insurance for various items outside the house, like cameras, computers, jewelry, bicycles, tefillin, two things need to be done: first, an extension named “all risk” needs to be added. Additionally, it’s important to know that the insurance company requires supervision over these items. If the insured took reasonable precautions, then in case of theft, the insurance will usually cover it.
2. Insured property intended for business: Property intended for business operations is not covered by regular insurance. If it’s a small business with no additional employees, it can be insured using a special extension. For more substantial businesses, a separate business policy is needed. In a recent case, the insurance company initially refused to pay a claim for expensive photography equipment, claiming it was intended for the customer’s  business. After a prolonged battle, they eventually agreed to pay.
3. Damage caused by terrorism: The regular policy does not cover damage caused by acts of terrorism or war. In these cases, the state is responsible, known as the “Property Tax.” You can cover such damages by purchasing an extension to the policy that covers terrorist acts but not war.
4. Building insurance for tenants’ committees: Common areas in residential buildings, like the roof and stairs, are not included in the policy. Insurance companies offer tenants’ committees to take out a separate policy for this purpose.
5. Unoccupied apartment: When it comes to an apartment unoccupied for more than 60 days, an extension needs to be added. This extension ensures that coverage remains even when the apartment is unoccupied.
6. Accidental breakage: TVs, mirrors, etc. that break inside the house are not covered. By using the “all risks” extension, you can get coverage for these situations.
7. Airbnb apartment: The regular policy does not cover apartments that have been rented out to third parties on a short term basis . To ensure coverage in this case, a specific business policy for this purpose needs to be purchased.

If you would like to review your existing policy or receive a quote for home insurance, emphasizing our advantages from our collective arrangement, feel free to reach out. We offer:

1. Private extension: you can choose your preferred provider.
2. Higher insurance sum tailored to your building’s construction standard.
3. Any additional extras you want.
4. All at an excellent price!

We’d be happy to assist with any questions or concerns.

Segal Insurance and Finance Agency, Ra’anana.