Court Penalizes Ayalon Insurance with Tenfold Interest Over Concealed Report
A court penalized Ayalon Insurance with tenfold punitive interest for concealing a medical disability report, nearly doubling a student's compensation to 88,000 shekels.
A Magistrate's Court has penalized Ayalon Insurance company with a rare tenfold punitive interest rate after finding the firm intentionally withheld a medical report confirming permanent disability for a young man injured during his school years. The ruling nearly doubled the compensation awarded to the plaintiff to 88,000 shekels.
The case dates back to an incident where the plaintiff, then 13.5 years old, broke his wrist during a school recess. Roughly seven years later, near the statute of limitations deadline, he sought compensation from Ayalon, which insures millions of students across Israel. Although Ayalon's appointed physician assessed a 10% permanent disability, the company concealed the finding, refused to extend the limitation period, and formally claimed the lawsuit was time-barred after the plaintiff filed an independent claim.
Presiding Judge Moti Cohen criticized the insurer's conduct, stating that Ayalon acted in bad faith by hiding the medical opinion in hopes the statute of limitations would expire. The court imposed a tiered penalty reaching 10 times the standard interest rate, alongside 20,000 shekels in legal fees. Legal experts note that Ayalon insures approximately 2.5 million Israeli students through August 2028.
