Menora Mivtachim Faces Class Action Over Motor Insurance Claims Inflation

The Central District Court approved a class action lawsuit this week against Menora Mivtachim insurance company over allegations of artificially inflating the claims reports of its motor insurance policyholders. At the center of the case is the claim that the company included third-party expenses, such as expert and legal fees, within the total claim amounts recorded in reports.

According to the statement of claim, including these peripheral expenses caused claim amounts to artificially exceed the 35% annual reporting threshold of the premium. Crossing this threshold grants insurance companies justification to hike policy prices. Plaintiffs argue this practice harmed clients' claim histories, both with Menora Mivtachim and other insurers, leading to unlawfully high premiums.

Legal Grounds and Demands

The legal proceeding, originally filed in 2021, was approved on grounds of breach of statutory duty, negligence, and unjust enrichment. The represented class includes policyholders who received claims reports between February 2014 and December 2021 containing third-party expenses. Remedies sought include the refund of premium differentials, compensation of 1,000 shekels per group member for emotional distress, and an injunction ordering the company to cease including these expenses.

Court Ruling and Market Impact

Alongside approving the class action, the court dismissed the original petitioner's individual claim and ordered a replacement representative plaintiff within sixty days. Menora Mivtachim, holding an approximate 8% market share in Israeli motor insurance, stated in an exchange filing that it is reviewing the decision.

The legal proceeding was approved on grounds of breach of statutory duty, negligence, and unjust enrichment, with plaintiffs demanding a refund of premium differentials.