Israel's Treasury Opposes Declaring Storm a Natural Disaster

Officials call mayors' 300 million shekel cost estimate an exaggeration.

Send in e-mailSend in e-mail
Send in e-mailSend in e-mail

The Finance Ministry is so far refusing to declare the four-day storm that struck Israel on Wednesday a natural disaster. Top treasury officials say they will fight the designation, even if the country’s political leadership get behind it.

Officials told TheMarker they feared declaring the storm a natural disaster would expose the government to compensation claims, certainty from businesses that suffered storm damage and possibly from individuals as well.

Officials, meanwhile, sought to play down the extent of the damage, noting among other things that the brunt of the storm occurred over the weekend, meaning relatively few work days were lost.

They said the Union of Local Authorities’ estimate of the cost of the storm damage, 300 million shekels (around $85.6 million), was exaggerated. Most of the cost of the storm was, in fact, borne by the government in the form of overtime pay to police officers, rescue workers and employees of the state-owned Israel Electric Corporation.

Officials said that while the regular state budget can cover these additional expenses, if the storm is declared a natural disaster the costs will multiply.

In additional to providing for direct financial assistance from the government, the natural disaster designation would entitle businesses and individuals who incurred storm damage to tax benefits. In the past the designation has been used to compensate farmers for losses resulting from bad weather as well as businesses and private individuals for losses due to war.

Meanwhile, the Association of Insurance Brokers and Agents in Israel has estimated that storm damage will cost insurance companies some 150 million shekels in claims. The group said its figures were based on the actual cost to insurers of a similarly large storm in 1992, which caused major blackouts.

The estimate includes payouts on policies that cover natural disasters, but does not include damage sustained to local governments or the state. The professional association said it expected to pay out an average of 15,000 shekels for each of around 10,000 claims.

Vehicles are seen stranded in snow at the entrance of Jerusalem on December 13, 2013 following a snowstorm. Credit: AFP
The Storm in Numbers, Dec. 16, 2013.

Click the alert icon to follow topics: