As car insurance premiums plummet, "Globes" finds out why

According to the Central Bureau of Statistics, the average price of vehicle insurance dropped by 8% in August alone.

After years of rises in vehicle insurance premiums, last year the trend reversed, partly because of intervention by the Capital Markets, Insurance and Savings Authority, which compelled the insurance companies to cut prices, and partly because of the market itself, thanks to a decline in vehicle theft.

According to the Central Bureau of Statistics, in August this year alone the average price of vehicle insurance fell by no less than 8%, the sharpest monthly decline since 1984. So far this year, vehicle insurance prices have fallen by 12%.

In his weekly market review, Phoenix Financial chief economist Matan Shitrit described the August number as "a surprise and a super-sharp fall." "This by itself reduced the Consumer Price Index by 0.15%. This is a surprise that I don’t think anyone expected," he wrote.

According to online insurance agent Wobi, premiums for comprehensive vehicle insurance have plummeted by 29% in the past two years, although compulsory insurance premiums have risen by 10%. Since the lion’s share of vehicle insurance payments goes to the comprehensive insurance, overall the cost has fallen. In actual money terms, the average annual cost of vehicle insurance (compulsory plus comprehensive) has fallen by over NIS 1,000. A market source said that this was "a conservative estimate."

Why particularly in August?

The reason that the most extreme change came in August lies in the fact that that this is when the Capital Markets, Insurance and Savings Authority obliged the insurance companies to publish their new prices. In fact, prices declined even before that, but the Central Bureau of Statistics saw the new advertised prices, hence the unusually sharp decline.

According to Shitrit, there are three factors behind the decline in the cost of vehicle insurance: vehicle parts prices have stabilized after rising significantly since the Covid pandemic; less road travel; and a sharp decline in vehicle theft. Since the beginning of 2025, theft has declined by more than 20%.

Talking to "Globes", a market source added a further factor. "One of the insurance companies decided to cut prices very aggressively last month," he said. "For example, it decided to cut third-party insurance by 11% in one month, and looking further back its prices have fallen by a third.

"It looks as though the Central Bureau of Statistics adjusted its figures once, in August, to what has been happening on the ground in the past year, because up to now that has not been reflected in their indices," the source added.

Falls continue in September

Initial figures from the vehicle insurance market for September that have reached "Globes" show that prices have continued to fall, by about 1.5%, this month. "Price falls are happening the whole time, even if not at the same rate," a market source said. The problem, though, he says is that "it would be enough for the Houthis to start making problems in the Red Sea again, or other problems, to lead to vehicle parts failing to arrive, and then the insurance companies will start to raise prices again, because they have to take the change into account a year in advance."

Meanwhile, the clear conclusion is that it’s worth bargaining over vehicle insurance premiums. A simple Google search will give you several insurance companies that will claim that they are prepared to offer you discounts of "up to 50% on comprehensive insurance." The price won’t really drop by 50%, but even a discount short of that could be worth a lot of money.

The fall in premiums is also reflected in the companies’ results. In their second quarter financials, Phoenix Financial, Clal Insurance, Harel, and Ayalon all reported falls in the tens of percentage points in their profits in this segment. Menora Mivtachim and Direct Insurance managed to maintain stability in their profits in this area, while Migdal actually posted a loss. The assessment in the industry at the time was that the third and fourth quarters would also not be good for vehicle insurers, as the decline in prices would continue.

Published by Globes, Israel business news - en.globes.co.il - on September 23, 2026.

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