Here are a few day-to-day examples where your insurance policy also doubles as a legal tool!
- Legal Defense in Motor Claims: If you cause damage to a person or property and are sued by either an individual or under the traffic laws, you have a legal defense within the standard motor policy. What happens is that the insurance company’s lawyers usually take over the case in full, thus saving you both the cost and hassle of a private law suit. You also have the option of using your own lawyer and getting a refund. The amount for such a legal defense ranges from NIS 12,000 to NIS 15,000.
- Third Party Claims: If you are sued under the Third Party section of either your homeowners’ or business policy, company lawyers are required to defend you. This is important as legal fees can often be much higher than the claim itself!
- Small Claims Court: Imagine this scenario. You are waiting patiently for the traffic light to change when someone preoccupied with his cell phone conversation rear ends the back of your car. You argue that he is at fault but he claims that you actually reversed into him! Since he obviously refuses to accept responsibility, his company will probably do likewise. This is a case for small claims court.
In order to sue in small claims court, you must fill out a form or file on-line, pay a small registration fee and await your day in court. (At the moment, the waiting period in Jerusalem is about three months.) Both parties appear to state their cases in their language of choice and bring witnesses. There are no attorneys present. After ten minutes of debate, the judge hands down his verdict. This court is good for any monetary claims up to NIS 33,800. Apart from all else, it’s a fascinating insight into the Israeli justice system.
(Regarding the option of choosing a Bet Din, ask your local Rabbi. If you are also planning on suing an insurance company, at present they do not accept the jurisdiction of a Bet Din.)
Mrs. F. took out a life insurance policy in 1995. Three years later, Mrs. F. underwent a mammography. On the day of the test, her husband contacted their insurance agent and requested to add on coverage for “serious diseases” including cover for cancer. On the application form the husband wrote that there had been no change in his wife’s medical condition. The endorsement was added onto the policy.
Eight months passed. Mrs. F. underwent a further test and was diagnosed with a definite case of breast cancer. The insurance company refused the claim and the case went to court. The judge ruled that a policy that had been issued on the basis of false information and therefore was in fact no policy. The relevant questions on the application form were: “Do you have any malignant growths?” The husband answered in the negative. The second question was whether or not any tests had been recently undertaken and this answer was left blank.
Despite the fact that at the time of the endorsement application there was no proof yet of cancer, the fact that Mrs. F. had gone in for testing was vital information which was withheld from the insurance company. If they had been aware of this, they would not have issued the endorsement.
Moral: Good intentions do not override the truth!
In this tip we will reveal some “small print” hidden snags in some of the most common insurance policies.
True or False? Anyone who has an international VISA or Master-Card has automatic free travel insurance with the regular coverage.
False. This only applies if you are an Israeli citizen. (Tourists who have such a card are not covered.) Another “slight” difference between the “freebie” policy and the standard policy is that in the former, the payout is limited to a daily ceiling rate (approx. $3,300 per day) whereas a standard policy has a global figure (usually $1,250,000). This can be extremely important when, for example, a day in the hospital, including lab tests, blood tests, etc., can often soar to the tens of thousands of dollars, especially in the U.S.A.
True or False? I have a mortgage which covers insurance for the building/apartment. This is sufficient insurance coverage.
True. You are covered for fire, water and earthquake damage. But, there is one item that is not included and that is Third Party Liability. This means that if a pipe bursts in your house and causes damage to your neighbor or should a visitor fall and sue you or should your dog bite a child, etc., you have no liability coverage. (Such coverage is always included in a private policy.)
True or False? When I originally took out my life insurance policy, I noted the beneficiaries of the policy and of my will. Since then, my situation has changed and I have changed my will. This change obviously relates to my life policy as well.
False. Insurance companies will only pay out to the beneficiaries stated in the policy. Therefore, as with a will, this should be changed as one’s situation changes.
Egert and Cohen Insurance