Damage from “Lion’s Roar” Conflict Estimated at Nearly 5 Billion Shekels

Unprecedented Damage Assessment
After a week of fighting in the ongoing “Lion’s Roar” conflict, the estimated direct damage to property has reached nearly 5 billion shekels, according to assessments from the Israeli Tax Authority. A representative from the authority has noted that “this scale of damage is unprecedented compared to past wars and conflicts,” emphasizing that as the situation continues, total damages could escalate even further.

Compensation Options for Residents
Residents seeking full compensation for home contents in the event of missile damage are encouraged to purchase insurance through the Tax Authority. In response to the mounting claims, the authority is also expanding its “fast track” compensation process, allowing claims of up to 30,000 shekels without the need for a property appraisal.

During the previous conflict, “Iron Swords,” the direct damages amounted to 2.7 billion shekels-a figure that now pales in comparison to the current figures from “Lion’s Roar.” To date, the compensation fund has received over 32,717 claims since the onset of the conflict, including 26,523 claims for property damage, 2,902 for vehicle damage, and 3,268 for damage to contents and equipment. Furthermore, 10,630 individuals have been evacuated from their homes.

Legal Obligations for Compensation
According to the Property Tax and Compensation Fund Law, the government is obligated to compensate its residents for both direct and indirect damages resulting from acts of hostility or warfare. Direct damage-defined legally as “damage caused to the physical entity of an asset”-is distinct from indirect damage, which is categorized as “loss or prevention of profit.”

Compensation for direct damages covers losses to property, buildings, and interior contents, without a cap, based on the principle of restoring conditions to their prior state. This includes all “connectors” linked to the building, such as kitchens, air conditioning units, and built-in closets. The average compensation for a 120-square-meter home is approximately 1.5 million shekels, though this figure can vary based on actual built area.

Compensation Rates and Insurance Options
For home contents, compensation is provided up to specific maximum amounts based on the type of item damaged. Compensation for furniture can reach up to 14,565 shekels for a single occupant or 25,187 shekels for a couple, with additional payments of 5,092 shekels for each child under 18 residing in the home. For clothing, compensation is available up to 2,552 shekels for individuals, 5,104 shekels for couples, and an additional 766 shekels for each child. Appliances and electronics have a compensation cap of 25,504 shekels for individuals and 30,914 shekels for couples, plus 518 shekels for each child under 18.

Given that the total cap on compensation for personal property can be around 100,000 shekels (dependent on family composition), the Tax Authority urges residents-both homeowners and renters-to consider purchasing additional insurance for their personal belongings at valuations exceeding the amounts outlined in regulations. The additional premium is calculated at 0.3% of the additional value up to a cap of approximately 1 million shekels.

During the early stages of the “Iron Swords” conflict, the Tax Authority initiated a campaign encouraging residents to increase their insurance coverage. Consequently, the number of expanded policies surged from 199 to 4,691 over the past year and a half. In just the week following the onset of “Lion’s Roar,” approximately 53,700 residents opted to extend their insurance coverage through the state, reflecting growing anxiety among residents due to the damages incurred so far.

State’s Role as the Insurer
As private insurance companies do not cover damages from warfare and acts of hostility-these being explicitly excluded from most policies-the state is stepping into the role of the ‘insurer.’ The financial burden on the government is expected to be substantial.

Business Compensation Mechanisms Under Discussion
In terms of economic impact, a committee on finance is scheduled to deliberate on compensation mechanisms for businesses affected by indirect damages during the conflict. The intention is to adapt the compensation frameworks that were in effect during the “Iron Swords” conflict to the current circumstances, which may include “green lanes” for specific sectors experiencing harsh security restrictions.

Dr. Ruby Netanzon, head of the Macro Center for Political Economy and economic adviser to the Business Organization (Lahev) stated, “In the event of complete shutdowns, our estimated economic damage could reach around 12 billion shekels per day. In the case of partial shutdowns, the estimates suggest damages of about 3.5 billion shekels daily.”

The ongoing review will take into consideration various factors, and updates regarding compensation policies will be communicated as developments unfold