The Knesset recently passed the initial reading of a bill.
If passed, it could mean lower motorcycle insurance rates. The government will create an inter-ministerial committee to devise a solution for dropping compulsory insurance rates. A decision is expected within 3 months.
Should this bill pass, motorcyclists’ compulsory insurance pool will change. Currently, insurance companies do not profit from compulsory insurance for motorcyclists. For most riders they are covered by a state-mandated pool which currently runs at a deficit. It also has a cap, mandated by law, of 8%.
The treasury hopes to increase insurance rates to cover these losses so the deficit could be brought down to zero. If they were able to do this, it would make the entire pool system unnecessary. This would no longer cause insurance companies to lose money by insuring motorcyclists.
There would be a new minimum level of losses for the insurance with the new bill. The treasury would not be able to raise the rates because it would change from a maximum deficit to a minimum deficit. Under the new bill it appears that the treasury will have no other choice but to lower the rates.
MK Fania Kirshenbaum (Yisrael Beiteinu) said, “Motorcyclists have suffered from years of continual insurance rate increases, and her bill would put an end to it.” She feels that the absence of a governmental stand on this creates a problem. Right now, motorcycle policies are based only on financial parameters, but there is hope that this will soon change.