Does comprehensive car insurance cover vehicle depreciation? 

Does comprehensive car insurance cover vehicle depreciation? 

🔹 Introduction: What is the Real Loss After an Accident?

Even if the damage to your vehicle is repaired after a traffic accident, it is still considered a "damaged vehicle.".

In other words, it's almost impossible to find a buyer at the same price when selling it on the market. This difference is called vehicle depreciation.

So, does comprehensive car insurance cover this loss?
Although comprehensive insurance may cover repairs at the service center after an accident, "diminished value" is a completely different type of damage.
In this article, we will examine the relationship between comprehensive car insurance and diminished value in all its aspects, both from a legal and insurance perspective.

🧾 1. What is Vehicle Depreciation?

Vehicle depreciation is the decrease in the value of a vehicle in the used car market after an accident.
Even if the vehicle is repaired with original parts, its value decreases in the eyes of potential buyers due to its accident history.

📌 Example:
A 2020 model vehicle worth 500,000 TL might see its market value drop to 450,000 TL after being damaged in an accident and subsequently repaired.
This 50,000 TL difference can be claimed as compensation for the vehicle's depreciation in value.

2. Against Whom Can Compensation for Diminution in Value Be Claimed?

Claims for vehicle depreciation are made against the negligent driver and their mandatory traffic insurance company.
In other words, the traffic insurance of the party at fault is obligated to pay for the other party's depreciation in value.

Therefore, under normal circumstances, comprehensive car insurance only covers the damage to the insured vehicle itself; it does not cover the decrease in value of the other party's vehicle.

Does the type of insurance cover the depreciation in value?
Compulsory Motor Insurance: Damage to the other party ✅ Yes.
Comprehensive Motor Insurance: Damage to the insured vehicle itself ❌ No.

3. What is Car Insurance and What is its Purpose?

Comprehensive car insurance is a type of private insurance that protects the vehicle owner against physical damage to their own vehicle.
The aim is to transfer the financial burden to the insurance company in the event of repairs or total loss (total damage) of the vehicle.

Comprehensive car insurance policies generally cover the following types of damage:
• Collision, impact, overturning, falling, fire,
• Theft, natural disasters such as floods and earthquakes,
• Vandalism, malicious acts by third parties,
• Some policies also include replacement vehicles, roadside assistance, and minor repair services.

However, vehicle depreciation insurance is not a standard coverage item in comprehensive car insurance policies.

4. When can comprehensive car insurance cover the decrease in vehicle value?

Under normal circumstances, comprehensive car insurance does not cover the depreciation in value of a vehicle.
However, some special policies or additional coverages may include this damage.

This is possible in the following cases:
1. If the policy explicitly includes "Vehicle Depreciation Coverage":
Private insurance companies can provide this coverage for an additional premium.
(For example, it may be called "Vehicle Market Value Protection Coverage" or "Depreciation Guarantee").
2. If the vehicle has been damaged without fault on the part of the driver:
In cases where the other party's traffic insurance does not pay, some comprehensive insurance policies may activate this coverage under the "no fault coverage" clause.
3. If the insured vehicle has suffered total loss (total loss):
In some policies, the insurance company uses the "market value protection" guarantee to base the coverage on the vehicle's market value before the accident.

5. The Difference Between Compulsory Traffic Insurance and Comprehensive Car Insurance

This is the most common misconception regarding vehicle depreciation.
Compulsory traffic insurance is mandatory for every vehicle owner and covers damages to the other party.
Comprehensive insurance, on the other hand, is entirely optional and covers damages to the insured vehicle itself.

Comparison: Compulsory Traffic Insurance vs. Comprehensive Car Insurance
Legal Requirement: Yes No
Coverage: Damage to the other party Damage to your own vehicle
Diminution in Value Does it cover? Yes Only if there is special coverage
Policy Price: Determined by the State Free market
Damage Calculation Insurance Information Center (SBM) formula Varies according to the policy

6. How is the Diminution in Value Calculated?

Factors considered in calculating depreciation:
1. Vehicle age and mileage
2. Nature of damage and repair method
3. Number of parts replaced (especially bodywork and paint)
4. Affected area (front panel, chassis, pillar, etc.)
5. Market value and make-model effect

This calculation is usually done through an expert report or appraisal report.
The Insurance Arbitration Commission also makes its decision based on these reports.

Simple Formula (SBM Application):

Depreciation = Vehicle Market Value × Damage Area Coefficient × Repair Coefficient × Usage Coefficient

8. Problems Encountered in Practice
• Misleading information from insurance companies: Some insurance companies may provide incomplete information by saying "your comprehensive insurance covers everything."
• Errors in the expert report: The depreciation rate may be calculated incorrectly.
• Vehicle owner's fault percentage: If there is contributory negligence, the compensation is reduced proportionally.
• Deficiencies in arbitration process applications: Applications with missing documents may be rejected.

9. Things to Consider When Choosing a Car Insurance Policy

Many people sign car insurance policies without reading them.
However, choosing the right coverage can prevent thousands of liras worth of damage in the future.

Key points to consider:
• Does the policy include "Vehicle Depreciation Coverage"?
• Does the policy include a market value protection guarantee?
• Is the coverage "full comprehensive" or "limited comprehensive"?
• Are the appraisal costs covered by the insurance company?

10. Conclusion: Car Insurance Does Not Provide Complete Protection

Comprehensive car insurance can cover physical repairs to your vehicle;
however, it does not cover the depreciation in value of the vehicle — unless there is specific coverage for this in the contract.

Therefore, every vehicle owner should:
1. Carefully read their policy,
2. Request compensation for the decrease in value from the at-fault party's traffic insurance,
3. Apply to the Insurance Arbitration Commission if necessary.