Israeli Court Approves Class Action Against Menora Mivtachim Over Auto Insurance Claims

The Central District Court in Israel has approved a class-action lawsuit against Menora Mivtachim, a major Israeli insurance company, alleging artificial inflation of its auto insurance claims reports. The lawsuit, initially filed in 2021, claims that Menora Mivtachim included expenses paid to third parties, such as expert and legal fees, in its reported claim amounts. This practice allegedly caused the reported claim amounts to exceed the annual reporting threshold of 35% of the premium, which insurance companies use to justify price increases.

The plaintiffs contend that this manipulation negatively impacted policyholders' claims history, not only with Menora Mivtachim but also with other insurers, leading to unlawfully high premiums. The lawsuit was approved on grounds of violating statutory duty, negligence, and unjust enrichment.

The typical group represented in the suit includes policyholders who received a claims report between February 2014 and December 2021 that included third-party expenses. The requested remedies include the refund of excess premiums, NIS 1,000 in compensation for each group member for distress, and an order for the company to cease including such expenses in the future and remove problematic past records.

While approving the class-action status, the court dismissed the original applicant's personal claim and ordered a replacement representative plaintiff to be found within 60 days. Menora Mivtachim, which holds approximately 8% of the Israeli auto insurance market, stated it is reviewing the decision.