Car Insurance Prices Plummet to Lowest Since 1984

Car insurance prices in Israel experienced their sharpest monthly drop since 1984, falling by 8% in August alone, according to data from the Central Bureau of Statistics. This significant decrease follows a trend reversal from previous years of rising premiums, attributed partly to regulatory intervention by the Capital Markets Authority and a decline in vehicle thefts. Year-to-date, car insurance costs have fallen by 12%, with comprehensive insurance prices dropping 29% over the past two years, while mandatory insurance prices have increased by 10%.

The dramatic August decline is linked to the Capital Markets Authority's directive for insurance companies to publish new, lower prices. Experts cite several factors contributing to this trend, including the stabilization of vehicle spare parts prices after significant increases post-COVID-19, reduced driving due to lower mileage, and a more than 20% decrease in car thefts since early 2025. One insurance company's aggressive price reduction of 11% on third-party liability insurance within a month also played a role.

Preliminary data suggests that prices continued to fall in September, albeit at a slower rate of 1.5%. However, market sources caution that future price increases could be triggered by external factors, such as disruptions to spare parts supply chains, referencing potential issues stemming from the Red Sea conflict. Consumers are advised to negotiate their insurance premiums, as significant discounts are reportedly available.

The impact of these price reductions is evident in the financial reports of insurance companies. Several major insurers, including The Phoenix, Clal, Harel, and Ayalon, reported substantial decreases in their profits from car insurance in the second quarter of the year. Industry professionals anticipate that the third and fourth quarters will also be challenging for the car insurance sector due to the ongoing price declines.