Sample Contract - 6

MOTOR VEHICLES ARE MANDATORY ON HIGHWAYS

FINANCIAL LIABILITY INSURANCE

(TRAFFIC INSURANCE) GENERAL TERMS AND CONDITIONS

 

COVERAGE OF INSURANCE

ARTICLE 1 - The insurer provides coverage, up to the mandatory insurance limits, for the legal liability of the operator, as defined in this policy, arising from causing death or injury to a person or damage to property during the operation of the motor vehicle, in accordance with the Highway Traffic Law No. 2918.

Depending on the vehicle, damage caused by the trailer or semi-trailer (including light trailers) being towed, or by a towed vehicle, is covered by the towing vehicle's insurance. However, trailers used for transporting people are covered only if an additional liability insurance policy specifying special conditions for them is provided in the policy.

Reasonable and necessary expenses incurred by the insured to prevent or mitigate damage in the event of an accident will be covered by the insurer.

This insurance also provides for the defense of the business owner (the insured) against unjustified claims.

GEOGRAPHICAL LIMITATION OF INSURANCE

ARTICLE 2 - This insurance is valid within the borders of Turkey.

EXCLUSIONS FROM INSURANCE COVERAGE

ARTICLE 3 - The following situations are excluded from insurance coverage:

1. a)Damages caused by vehicles that are not in operation,
2. b)Compensation claims to be made by the operator,
3. c)Claims that the business owner's spouse, ascendants and descendants, those related to him through adoption, and siblings living with him may make due to damages to their property,
4. d)Claims that may be brought against the operator for damages to goods carried in the vehicle or trailers, excluding baggage and similar items accompanying the injured parties,
5. e)Claims for moral damages,
6. f)Claims arising from damage to the operator's vehicle or to trailers and semi-trailers or towed vehicles by means of such vehicle,
7. g)Claims arising from damage to the operator's vehicle or trailers and semi-trailers towed by this vehicle or towed vehicles,
8. h) All claims relating to damages caused by vehicles left with enterprises engaged in professional activities related to motor vehicles, whether for inspection, repair, maintenance, purchase and sale, modification, or similar purposes.
9. i) Damages resulting from the vehicle's participation in races organized with the permission of the competent authorities, or accompanying vehicles participating in races, or its use in demonstrations,
10. j) Claims arising from damages caused by stolen or hijacked vehicles for which the operator is not liable under the Highway Traffic Law, as well as claims arising from damages suffered by persons who knowingly boarded a stolen or hijacked vehicle, and claims by the thief or hijacker.

PRESERVATION OF THE RIGHTS OF THE INJURED PARTIES AND THE INSURER'S RIGHT OF RECOURSE AGAINST THE OPERATOR

ARTICLE 4 - Circumstances arising from the insurance contract or legal provisions relating to the insurance contract that result in the elimination or reduction of the compensation obligation cannot be invoked against the injured party.

The insurer that has made the payment may seek recourse against the insured to the extent that it can achieve the cancellation or reduction of the compensation, in accordance with the insurance contract and the legal provisions relating to this contract.

The policyholder may be held liable for recourse primarily for the following reasons:

1. a)If the event giving rise to compensation occurred as a result of an intentional act or gross negligence on the part of the operator or persons for whom the operator is responsible,
2. b)If the operator knows, or could have known with due diligence, that the special insurance required under the Highway Traffic Law has not been obtained for a race organized without permission from the competent authorities,
3. c)If the incident requiring compensation occurred as a result of the vehicle being driven by persons who did not possess the required driver's license according to the provisions of the Highway Traffic Law,
4. d)If the event giving rise to compensation occurred while the business, or persons for whose actions it is responsible, or persons to whom the motor vehicle was given gratuitously as a favor, were operating the vehicle under the influence of drugs or intoxicating substances, or if the event resulted from the aforementioned persons having lost their ability to drive safely due to having consumed alcoholic beverages.
5. e)If the incident requiring compensation occurred as a result of transporting passengers in vehicles not licensed for passenger transport, or transporting passengers or cargo exceeding the capacity limit determined by the competent authorities, or if it occurred in vehicles not licensed for transporting explosives and dangerous materials, due to the ignition, combustion, or explosion of these materials,
6. f)If the insured's failure to fulfill the obligations specified in Article 10 in the event of the occurrence of the risk results in an increase in the amount of damages and losses,
7. (g)If the event giving rise to compensation is theft or hijacking of the vehicle, and it is determined that the operator or persons for whom he/she is responsible were at fault in the theft or hijacking.

START AND END OF INSURANCE

ARTICLE 5 - Unless otherwise agreed, the insurance shall commence and terminate at 12:00 noon Turkish time on the dates specified in the policy.

PAYMENT OF INSURANCE PREMIUM

ARTICLE 6 - Insurance costs consist of premiums, taxes, duties and fees stipulated in Article 13, and contributions to the Guarantee Fund.

ARTICLE 7 - The insurer has accepted this insurance based on the insured's written statement in the policy and its annexes, regarding the true state of the risk.

If the insured's declaration is false or incomplete, and this would have required the insurer to enter into the contract under more onerous terms, the insurer shall notify the insured of the premium difference within …….. days of becoming aware of the situation. If the insured fails to pay the requested premium difference or declares that they will not pay it within …….. days following the date of notification, the contract shall be terminated.

In the event of termination of the contract, the premium for the period up to the date the termination takes effect will be calculated on a short-term basis, and any excess will be refunded.

If the difference in premium is not requested within the specified time, the right to terminate the contract lapses.

If the false statement is discovered after the occurrence of the event causing the damage, the compensation paid and to be paid for this damage;

1. a)If the false statement is made intentionally, it applies in full.
2. (b)If there is no intent, the insurer may seek recourse against the policyholder for the amount of compensation payable, excluding the portion corresponding to the ratio between the premium received and the premium that should have been received.

CHANGES OCCURRING DURING THE INSURANCE PERIOD

ARTICLE 8 - The insured is obligated to notify the insurer of any changes that may increase the risk after the conclusion of the contract, no later than …….. days from the moment they become aware of the situation. The insurer shall notify the insured of the payment of the premium difference within …….. days from the moment they become aware of the situation. If the insured fails to pay the requested premium difference or declares that they will not pay it within …….. days following the date of notification, the contract shall be terminated.

In the event of termination of the contract, the premium for the period up to the date the termination takes effect will be calculated on a short-term basis, and any excess will be refunded.

If the difference in premium is not requested within the specified time, the right to terminate the contract lapses.

With respect to compensation paid or payable for events occurring before the notification obligation regarding said changes has been fulfilled, the provisions of paragraphs (a) and (b) of Article 7 concerning the insurer's right of recourse shall apply, depending on whether the notification of the change was intentional or not.

If changes occurring during the insurance period are found to be of a risk-mitigating nature and warrant a lower premium, the difference in premium calculated on a daily basis for the period from the date of the change until the termination of the contract will be refunded to the insured.

CHANGE OF OWNERSHIP

ARTICLE 9 - In the event of a change in the operator of the insured vehicle, the transferor must notify the insurer within …….. days.

The insurer may terminate the insurance contract within …….. days from the date of notification of the situation. The insurance is valid until …….. days after the termination date. In case of termination of the contract, premiums for the unused days will be refunded on a daily basis.

Furthermore, if the new owner does not accept the continuation of the insurance within fifteen days, or if they enter into another insurance contract for the vehicle, this insurance will become null and void.

INSURED'S OBLIGATIONS IN CASE OF THE OCCURRENCE OF THE RISK

ARTICLE 10 - In the event of the occurrence of the risk, the insured is obliged to fulfill the following requirements:

1. a) According to this contract, the insurer must notify the insurer of any event that would give rise to liability within …….. days of becoming aware of it.
2. b) To take necessary rescue and protection measures as if not insured and to comply with the instructions given by the insurer for this purpose.
3. c) Upon the insurer's request, to provide without delay all available information and documents that are useful in determining the cause of the event and the damage, the circumstances under which it occurred and its consequences, the amount of compensation liability, and the exercise of the right of recourse.
4. d) In cases where the insured party faces a claim for compensation through legal action or other means, or where criminal proceedings are initiated against them, they must immediately inform the insurer of the situation and immediately provide the insurer with all notices, summonses, and similar documents received regarding the claim for damages and criminal proceedings.
5. e) To inform the insurer of any other insurance contracts related to the subject of this insurance.

INSURER'S SUBROGATION

ARTICLE 11 - The insurer legally replaces the insured to the extent of the compensation paid.

PAYMENT OF COMPENSATION AND EXPENSES

ARTICLE 12 - The insurer has the right to contact and reach an agreement directly with third parties who have made claims for damages.

However, unless the insurer gives written permission, the insured is not authorized to accept the claim in whole or in part and cannot make any compensation payments to the injured parties.

Insurer,

1. a)The claimed compensation and expenses shall be paid from the date the claimant submits the accident and damage report or expert report and necessary documents to one of the insurer's headquarters or branches,
2. (b)The insurance company will pay the expenses of first aid, examination and control, or outpatient treatment in hospitals, clinics and other places due to the injury, as well as other expenses required for treatment, within …….. business days from the date of application, along with supporting documents, within the limits of the insurance coverage.

In the event of a lawsuit, the insurer is responsible for pursuing and managing the case up to the limits stated in the insurance policy, and the insured is obliged to provide the necessary power of attorney to the lawyer appointed by the insurer. The insurer is liable for paying court costs and attorney fees. However, if the awarded compensation exceeds the insurance amount, the insurer will pay these costs in proportion to the ratio of the insurance amount to the compensation.

If criminal proceedings are initiated against the insured or those held responsible for their actions, the insurer may participate in the defense with the defendant's permission. In this case, the insurer will only pay the expenses of the lawyer it has chosen.

All expenses arising from criminal prosecution, as well as any potential fines, are excluded from insurance coverage.

 

TAXES, FEES, AND CONTRIBUTIONS TO THE GUARANTEE FUND

ARTICLE 13 - Existing and future taxes, duties, and fees related to the insurance contract, its value, or premium, as well as the insured's contribution to the Guarantee Fund, shall be paid by the insured.

NOTIFICATIONS AND REPORTS

ARTICLE 14 - Notifications and communications from the insured shall be made to the insurance company's headquarters or to the agent who brokered the insurance contract, either through a notary public or by registered mail.

The insurance company's notifications and communications are also sent to the insured's address shown in the policy; if these addresses have changed, they are sent to the last address reported to the insurance company's headquarters or the agent who brokered the insurance contract.

Notifications and communications made by letter or telegram delivered in person against signature are also considered equivalent to registered mail.

MAINTAINING TRADE AND PROFESSIONAL SECRETS

ARTICLE 15 - Lawsuits concerning legal liability arising from motor vehicle accidents may be filed in one of the courts located where the insurer's headquarters or branch is situated, or where the insurance contract was made by the agent, or in the court of the place where the accident occurred.

STATUTE OF LIMITATIONS

ARTICLE 17 - Claims for compensation for damages arising from motor vehicle accidents are subject to a statute of limitations of two years from the date the injured party learns of the damage and the person liable for compensation, and in any case, …….. years from the date of the accident.

If the lawsuit arises from an act punishable by law, and the criminal code prescribes a longer statute of limitations for that act, this longer period also applies to claims for compensation.

If the statute of limitations is interrupted against the person liable for compensation, it is also interrupted against the insurer. An interruption of the statute of limitations with respect to the insurer is deemed to have also been interrupted with respect to the person liable for compensation.

In motor vehicle accidents, the right of recourse between parties liable for compensation expires after …….. years, starting from the day they fully fulfill their obligations and become aware of the person against whom they have recourse.

In other respects, general provisions apply.

SPECIAL CONDITIONS

ARTICLE 18 - Special conditions may be included, provided that they do not contradict these general conditions and any related clauses, and are not detrimental to the insured.

FORCE

ARTICLE 19 - These general conditions shall enter into force on …/…/… date.