Work-linked Car Accidents Cost Israeli Government $991m in Decade

Private insurers should be picking up cost, but state has never acted

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A traffic jam on the Ayalon Highway (Route 20) in Tel Aviv, September 2016.
A traffic jam on the Ayalon Highway (Route 20) in Tel Aviv, September 2016.Credit: Moti Milrod

The cost of road accidents is paid twice – once by the friends and family of the more than 300 Israelis who die every year in them, and a second time in financial terms when the government’s National Insurance Institute pays out a claim.

How much that financial cost comes to was only recently made public by Or Yarok, a nonprofit organization that seeks to advance safer driving, using data from the Central Bureau of Statistics. It found that in the decade from 2007 through 2016, the cost amounted to 3.36 billion shekels ($991 million).

That means some 340 million shekels annually at a time when the NII is threatened with bankruptcy in another 15 years.

The road accidents that the NII covers are those designated as work-related, i.e., occurring when the victim was either on the job or driving to or from work. In theory, the NII should be able to collect the payments from private insurance companies, but because of mismanagement and resistance from the insurers, the NII hasn’t collected any money from them in the past 40 years.

“The carnage on the roads is growing year to year and so is the money that the government is paying out to the injured and the families of those who die. Road accidents are costing Israeli companies a lot, both economic and in human terms. We have to lower the price significantly,” said Erez Kita, Or Yarok’s CEO.

The group has in the past estimated that the total cost of road accidents to the Israeli economy at a much bigger 16 billion shekels annually, a figure that factors in costs including medical treatment and work days lost to the economy due to death or injury.

The number of Israelis injured in work-related road accidents averaged about 11,000 annually over the last decade, although there was a sudden surge of 10% above that number in 2015.

Moreover, the percentage of accidents designated as work-related has been growing. The latest NII data show they accounted for 24.5% of all work-related accidents, up from 22.8% in 2011. Work-related road accidents cause more injuries than other work-related accidents, causing the average victim to lose 4.35 days of work versus 3.92 for all other categories.

In 2015, the last year for which there are final figures, the NII paid out 310 milion shekels in claims on work-related roadaccidents. Of that 172 million was workmen’s compensation for the injured and 5.2 milion to families of the deceased, money that will continue to be paid for years as monthly allowances.