How a UK Driver Reversed an Israeli Insurer's Licence Denial

Result: NIS 88,400 vehicle payment and a NIS 262,000 personal injury settlement recovered after an Israeli insurer withdrew a "no valid driving licence" denial · Timeline: 7 months from the denial letter to payment · Challenge: Insurer counted the year from the wrong entry stamp · Authority: Population and Immigration Authority · Financial Impact: NIS 350,400

Background

A couple in their sixties, both retired, live outside St Albans and own a two-bedroom flat two streets back from the beach in Netanya. They bought it in 2019 and they use it in long stretches, six or eight weeks at a time, sometimes longer over the winter. In 2022 they stopped renting cars and bought a nine-year-old Mazda that lives in the building's car park with a cover over it.

On 8 August 2025 the husband was driving south on Highway 2 when a van crossed into his lane. He fractured his right wrist, tore the rotator cuff in the same shoulder, and the car was written off. He held a full UK photocard licence issued by the DVLA, current, with the correct categories on the back. He had never been asked for anything else in six years of driving in Israel.

Six weeks later the insurer's letter arrived. The claim was refused in full. Their reasoning ran to two sentences: he was not an Israeli resident, he had entered Israel on 14 March 2024, and the accident happened seventeen months later, so his authority to drive on a foreign licence had expired and he had been driving without a valid licence.

The Challenge

The insurer was applying the right rule to the wrong facts, which is the most expensive kind of mistake because it looks correct on paper.

Regulation 567 of the Traffic Regulations 1961 is what allows a visitor to drive in Israel at all. A person who is not an Israeli resident and holds a valid foreign driving licence is treated as holding an equivalent Israeli licence, provided they meet the age conditions and their stay in Israel since the last entry has not exceeded one year counted cumulatively. The part almost nobody knows, including some claims handlers, is the qualification attached to it: an absence from Israel of more than three months in aggregate during that period breaks the count. The stamp in the passport is not the answer on its own. The travel history behind it is.

Two things turned on this, and the second was worse than the first. The comprehensive policy carried the usual condition that the driver hold a valid licence for the vehicle, so a finding of no licence killed the NIS 88,400 vehicle claim. But Section 7(3) of the Road Accident Victims Compensation Law 1975 goes further. Israeli road accident compensation is a no-fault system: Section 2 makes the user of a vehicle liable for bodily injury caused in a road accident regardless of blame, which is why an injured driver normally recovers from his own compulsory insurer without arguing about who caused what. Section 7 strips that right from certain drivers, and Section 7(3) covers a person who drove without a driving licence. The Karnit fund, which exists to compensate victims of uninsured and hit-and-run drivers, does not fill the gap for a driver disqualified under Section 7. A man with a fractured wrist and a torn shoulder would have had nothing to claim from anyone.

In Practice: Regulation 567 of the Traffic Regulations 1961 treats a non-resident holding a valid foreign licence as holding an equivalent Israeli licence, but only while the stay in Israel since the last entry has not exceeded one year counted cumulatively, and an absence of more than three months in aggregate during that period restarts the count. The evidence is the entry and exit report held by the Population and Immigration Authority, which an attorney can request on an apostilled power of attorney and which was issued to us nine working days after filing. In this file the report was the difference between a NIS 88,400 vehicle claim being refused and being paid.

What We Did

We started with the travel record rather than with the law, because the law was not in dispute and the facts were.

The entry and exit report came back showing five movements across the relevant period. He entered on 14 March 2024, which was the stamp the insurer had found. He left on 20 June 2024 and did not come back until 5 October, an absence of three months and fifteen days. He left again on 11 December and returned on 2 February 2025. On the day of the accident he had been in Israel for 254 days in total since the October re-entry, and the summer absence had passed the three-month mark that restarts the reckoning. On either way of counting, cumulative days present or time since the qualifying absence, he was inside Regulation 567 and had been throughout.

We put that to the insurer's legal department in a four-page letter with the report attached, together with a DVLA licence summary printed from the check-code service showing the licence current and the categories intact, and the Israel Police accident report from Netanya station recording the van driver's lane change. We asked for the denial to be withdrawn within twenty-one days and said what we would file if it was not.

They took five weeks and withdrew it in one paragraph, without conceding that the original decision had been wrong. That is normal. The concession that matters is the one on the payment side.

In Practice: Section 2 of the Road Accident Victims Compensation Law 1975 imposes liability on the user of a vehicle for bodily injury in a road accident without proof of fault, and Section 7(3) removes that entitlement from a person who drove without a driving licence, with the Karnit fund giving no cover to a driver disqualified under Section 7. Once cover was reinstated the insurer appointed its own orthopaedic examiner, an appointment that took eleven weeks to schedule, and the injury head of claim settled at NIS 262,000 against our expert's assessment of 19% permanent disability.

The Outcome

The vehicle claim paid out at NIS 88,400, being the agreed pre-accident value less the NIS 2,100 excess. The injury claim settled seven months after the denial letter at NIS 262,000, roughly £57,000 at the rate on the day, without proceedings being issued. Karnit was never involved, which was the point of the exercise. Their UK accountant confirmed the injury damages were not taxable income in the United Kingdom.

What the couple actually took away was a habit rather than a cheque. They now write down every entry and exit date, keep the boarding passes, and know that the number to watch is not the expiry date printed on the photocard. Their Israeli position resets when they are away for more than three months in aggregate, and if a winter ever stretches long enough to cross the year while they are in the country, the answer is a conversion at the Licensing Bureau (Misrad HaRishui) rather than hoping nobody asks. The practical detail behind all of it is set out in our guide to driving in Israel as a non-resident.

Key Takeaways

What this case illustrates for non-residents in similar situations:

1. A denial letter is an opening position, not a finding. Israeli insurers refuse on the entry stamp because it is the fact in front of them. The travel history behind the stamp is held by the state and is obtainable, and it frequently says something different.
2. The three-month absence rule is the part that saves people. Regulation 567 counts your stay cumulatively from the last entry, and a break of more than three months in aggregate restarts it. Owners who come and go for long visits are usually further inside the rule than they fear.
3. Keep your own entry and exit log. The Population and Immigration Authority holds the record, but getting it takes a power of attorney, an apostille and a couple of weeks. A note on your phone at each landing costs nothing and answers the question immediately.
4. The licence problem is a personal injury problem first. Losing the vehicle claim is a bad day. Losing the right to compensation for your own injuries under Section 7(3) of the Road Accident Victims Compensation Law 1975, with no Karnit behind it, is the risk that should decide whether you drive at all in a long stay.
5. Living abroad is not a shelter. Israeli claimants pursue non-resident drivers, and an Israeli money judgment does not stop at the airport. Treat an Israeli accident with the seriousness you would give one at home.

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Facing a Similar Situation?

If an Israeli insurer has refused a claim on the basis that you were not licensed to drive, the answer usually lies in dates you can prove rather than in an argument about the rule. The same question decides whether your own injuries are compensable at all.

Contact us for a confidential consultation about your Israeli legal matter.