Fire damages expected to cost state at least NIS 2 billion
After declaring the spate of blazes to be acts of terrorism, the state will have to carry the onus of compensating citizens for damages incurred, rather than the insurance companies; damages to homes estimated at over NIS 700 million, while public property suffered at least NIS 300 million in damages.
The damages caused in the spate of fires that plagued Israel last week are expected to be among the costliest in Israel's history, with unofficial estimates putting it at around NIS 2 billion at least.
Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon have declared that most of the recent blazes were caused as a result of nationalistically-motivated arson.
If the fires are indeed recognized as acts of terrorism, the state would have to carry the onus of compensating citizens for damages incurred, rather than the insurance companies.
Legally, recognizing an incident as an act of terrorism can only be done by one of the branches of the security establishment, based on their investigation. But the prime minister, the defense minister, the public security minister and the government can all also declare an incident to be an act of terror or war.
This means the state would have to compensate citizens for direct damages (the burning of the structure or the contents of the house), indirect damages (for example, the loss of future income for a business that burned down), lost work days and more.
Those expected to lose out are citizens who had their properties insured, as the compensation the state would provide them with would be lower than what the insurance company would be required to pay and would not cover many of the valuables that perished in the fires, such as jewelry, art, and the like.
According to initial calculations, by Saturday, direct damages to apartments and houses were measured at more than NIS 700 million, while public property like roads, the electric power system, infrastructure and public buildings suffered at least NIS 300 million in damages.
The firefighting expenses are amount to hundreds of millions of shekels. In addition, Israel would have to pay for the air and ground assistance provided by other countries—including the American Supertanker—a sum estimated at around NIS 150-200 million.
Restocking Israel's Fire & Rescue Authority and the wear and tear caused to hundreds of firefighting vehicles and equipment will cost, based on an initial and crude estimate, some NIS 100 million.
Salaries for thousands of employees—including firefighters, security forces, and municipality workers—and other related expenses are estimated at hundreds of millions of shekels.
Furthermore, compensation for indirect damages will have to be paid to businesses and to farmers whose lands were damaged or destroyed in the fires. More funds will be needed to rehabilitate forests that were destroyed.
"These damages are on an enormous scale, the likes of which we have not encountered in any natural disaster in Israel's history—only in wars," said an official at the Finance Ministry. "The final calculations of the damages caused by the fires—both to the state's coffers and to the public in general—could only be done weeks after the event. These are very complicated calculations."
On Sunday morning, dozens of property tax teams are expected to arrive in over 30 municipalities to begin assessing the damages caused by the fires to apartments, structures, infrastructure, vehicles, and other private and public property. It is expected to take them days to assess all of the damages.
The Finance Ministry, meanwhile, will have to find the budget to pay for all of the expenses incurred by the fires. One of the options examined is imposing budget cuts on all government ministries.