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The Federation of Israeli Chambers of Commerce on Tuesday called on the government to reform the motorcycle insurance system to allow for personal policies based on individual drivers' profiles rather than the blanket rates presently applied to all two-wheel vehicles.
Federation president Uriel Lynn called the existing government mechanism "monopolistic."
Motorcycle and moped insurance is currently provided through a government mechanism to provide mandatory insurance to groups neglected by the insurance market. Known as "the pool," the system groups together all insurance providers in the country and requires their participation in proportion to their stake in the mandatory insurance market as a whole.
The pool dictates a uniform rate to be paid for each two-wheel vehicle based on its engine volume, without any relation to the profile of those driving it.
Differential insurance rates applied to individual motorcycle and moped drivers would "increase drivers' personal responsibility, bring down the astronomical costs of existing insurance tariffs in the market, and open the market to competition," Lynn said.
In situations when multiple drivers make use of one vehicle, the system indirectly encourages irresponsible driving, Lynn argued.
Furthermore, the fact that motorcycle owners may submit claims and receive payment for minor damages without paying a sum beyond the flat rate encourages abuse of the system, he said.
"The majority of minor claims are fictitious," said Dror Goldman, chairman of the Two-Wheel Vehicle Importers Association. Of the roughly NIS 150 million in total claims in 2005, between NIS 70m. and NIS 100m. were gratuitous, he estimated.
Requiring motorcyclists to pay claims up to a given threshold (defined as the level of self-participation in the claim), only above which they would receive payment - for serious accidents only - would curtail the abuse and allow for lower premiums, Goldman claimed. Abuse by the few causes exorbitantly high rates to be paid by honest majority of motorcycle and moped owners, he argued, noting that the rates have risen more than one-third in five years.
The office of Yadin Antebi, Finance Ministry director of the capital market, insurance, and savings, responded that a differential tariff was currently under examination, but that the idea of fixing insurance rates to individual drivers, as opposed to the vehicle, had been examined and rejected in the past.
Insurance for four-wheel vehicles is also applied to the vehicle, not the driver, the spokesperson noted. The ministry did not oppose requiring a certain level of self-participation on claims, but the idea did not yet develop into a legislation proposal, the spokesperson said.
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