How to Claim Compensation for Vehicle Depreciation in Traffic Accidents?

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What is vehicle depreciation?

Vehicle depreciation is the decrease in the resale value of a vehicle damaged in a traffic accident, compared to its resale value after repair. In other words, even if the vehicle has been repaired, had parts replaced or repainted, and is technically usable, it can still be sold at a lower price on the market as a vehicle with a damage history. This economic decrease vehicle depreciation compensation .

One of the most common misconceptions among car owners after traffic accidents is the belief that "my car has been repaired, there is no further damage." However, even if the bodywork, chassis, paint, mechanical parts, or electronic components of the vehicle are repaired, it will lose value in the used car market due to its accident and damage history. This loss can be significant, especially for high-model, low-mileage vehicles with no damage history.

Vehicle depreciation compensation differs from vehicle repair costs. Repair costs refer to the expenses incurred in repairing or replacing damaged parts of the vehicle. Depreciation, on the other hand, is the decrease in the market value of the vehicle after repairs. Therefore, the vehicle owner can claim both the repair costs and, if the conditions are met, compensation for the depreciation.

In the general terms and conditions of mandatory traffic insurance, coverage for material damages is defined as a type of coverage that covers the direct decrease in the insured's property and the loss of value of the damaged vehicle. The general terms and conditions state that the loss of value will be determined by an insurance expert, taking into account the vehicle's make, age, model, level of use, damaged parts, past damage history, and the difference between its pre-accident and post-repair resale value.

Legal Basis for Vehicle Depreciation Compensation

The decrease in vehicle value resulting from a traffic accident is legally considered a material loss. According to the Highway Traffic Law No. 2918, if the operation of a motor vehicle causes death, injury, or damage to property, the operator of the motor vehicle and, if the conditions are met, the owner of the enterprise to which it belongs, are jointly and severally liable for the resulting damage. The law also stipulates that the operator, driver, or any auxiliary persons involved in the operation of the vehicle are liable for their own fault as if it were their own.

This regulation is important in terms of vehicle depreciation claims. This is because the person responsible for the accident may not only be the driver. The vehicle owner, operator, commercial enterprise, business owner (if it is a company vehicle), and insurance company may also be held liable depending on the specific circumstances of the case.

According to Article 97 of the Highway Traffic Law, the injured party can file a claim and lawsuit directly against the insurer within the limits stipulated in the compulsory financial liability insurance. Therefore, in most cases, compensation for vehicle depreciation is initially claimed from the compulsory traffic insurance of the vehicle that caused the accident.

From whom can compensation for vehicle depreciation be claimed?

Compensation for vehicle depreciation can be claimed from the compulsory traffic insurance of the party at fault in the accident, from the driver of the at-fault vehicle, from the vehicle owner, from the vehicle operator, and in some cases, from the commercial enterprise to which the vehicle is registered. If the damage exceeds the limit of the compulsory traffic insurance or if the insurance company does not cover certain items, it may be necessary to claim the excess amount from the driver and the operator.

In practice, the most practical approach is to first apply to the at-fault vehicle's traffic insurance. Traffic insurance covers material damages caused by the at-fault vehicle to third parties within the policy limits. However, if the insurance company refuses to pay, makes an insufficient payment, or has an error in calculation, the vehicle owner can apply to the Insurance Arbitration Commission or file a lawsuit in the competent court.

The comprehensive insurance of the vehicle that caused the accident is, as a rule, not directly liable for the depreciation in value of the damaged third party's vehicle. Comprehensive insurance is essentially an optional insurance that covers damages to the insured's own vehicle according to the policy terms. In contrast, for the owner of the damaged vehicle, the primary liability lies with the compulsory motor insurance of the vehicle at fault. Of course, specific policy terms, optional liability insurance, and special coverages should be examined separately.

Conditions for Receiving Vehicle Depreciation Compensation

To claim vehicle depreciation, there must first be a traffic accident. This accident could be a collision between two vehicles, or it could be a collision with a parked vehicle, an intersection accident, a chain-reaction accident, a service vehicle accident, or a commercial vehicle accident. The important thing is that the accident resulted in material damage to the vehicle and that this damage reduced its resale value.

The second condition is that the vehicle owner claiming depreciation must not be entirely at fault in the accident. If the vehicle owner or driver is 100% at fault, they cannot claim depreciation from the other party's insurance. However, if there is partial fault, the compensation does not disappear entirely; the calculated depreciation is reduced according to the degree of fault. For example, if the other party is 75% at fault and the vehicle owner is 25% at fault, the depreciation that can be claimed will be determined accordingly.

The third condition is that the vehicle must have damage that could lead to a decrease in its value. Not every minor scratch or simple plastic part replacement will automatically result in a significant decrease in value. However, damage affecting the bodywork, paint, replaced parts, chassis, pillars, panels, doors, fenders, hood, trunk lid, mechanical components, or safety systems is important in calculating the decrease in value.

The fourth condition is that the depreciation in value must be tangible and technically calculable. Vehicle depreciation is not determined solely by the subjective statement of the vehicle owner. Typically, the difference between the pre-accident and post-repair market value is determined through an insurance adjuster, independent appraiser, expert witness, or a specialist appointed by the court.

How is vehicle depreciation calculated?

There is no single fixed amount for calculating vehicle depreciation. The depreciation of two different vehicles in the same accident can be completely different. This is because the calculation considers the vehicle's make, model, year of manufacture, mileage, damage history, whether it has had previous paintwork or replaced parts, the location of the damage, the nature of the repair, and the vehicle's resale market conditions.

For example, a new model car with low mileage and no prior accident history may experience a significant depreciation if the left front door and fender have been replaced. Conversely, the same damage to an older model car with high mileage and numerous previous accident records may result in a lower depreciation. This is because buyers in the used car market place great importance on a vehicle's past accident history, replaced parts, and accident records.

With the general terms and conditions amendment that will come into effect on July 1, 2026, it is stipulated that the depreciation compensation will be calculated and paid to the rightful owners together with the material damage without requiring a separate application. In its announcement, the Insurance and Disaster Management Authority (SEDDK) stated that the standardization of depreciation calculation methods and expert reports, as well as the regulations regarding the smart expert assignment application in traffic insurance, have been completed; and that the depreciation compensation will be calculated and paid together with the material damage.

With the new regulation, the difference between the vehicle's resale value before the accident and its resale value after repair will be taken into account in the depreciation calculation; if a damage expert has been appointed, that same expert will include their depreciation assessment in their report; and the insurer will notify the claimant of the calculated depreciation amount. The effective date of these regulations has been set as July 1, 2026.

How to Apply for Depreciation in Value?

The first step in the vehicle depreciation process is to apply to the mandatory traffic insurance of the at-fault vehicle. The application must be in writing and supported by as complete documentation as possible. The application should clearly state the date of the accident, license plate information, damage file information, fault status, requested depreciation amount, bank account information, and contact information.

In the current practice, explicitly stating the claim for depreciation in value separately reduces the risk of losing your rights. Although the system, which will come into effect after July 1, 2026, stipulates that a claimant who applies for vehicle damage will also be considered to have made a claim for depreciation in value, in practice, explicitly stating the claim for depreciation in value in the application is a safer method. This prevents the insurance company from making defenses such as "there was no claim for depreciation in value" or "the application was incomplete".

The following documents are typically required when applying to an insurance company: accident report, traffic police or gendarmerie report, fault report, vehicle registration certificate, driver's license, insurance policy, damage claim documents, expert report, repair invoice, service records, photos of the damaged and repaired vehicle, Tramer (Turkish vehicle damage registry) records, and the vehicle owner's identification and bank information.

According to the Insurance Arbitration Commission's application guidelines, in insurance disputes, an application should first be made to the relevant insurance company; if the insurance company's response does not satisfy the request, or if a written response is not provided within 15 days in the case of traffic insurance, an application can be made to the Commission. It is also stated that Commission applications are generally evaluated based on the case file, and that submitting documents proving the claim is important.

How long does it take for the insurance company to make the payment?

According to Article 99 of the Highway Traffic Law, insurers are obliged to pay amounts within the limits of compulsory financial liability insurance within eight business days from the date the claimant submits the accident or damage report or expert report to one of the insurer's headquarters or branches.

However, in practice, the 15-day response period is important for resorting to arbitration or litigation. The Insurance Arbitration Commission states that in traffic insurance cases, an application can be made if the insurance company does not provide a written response within 15 days or if the response given does not satisfy the claim.

Therefore, the correct procedure for the vehicle owner is as follows: A complete application must be submitted to the insurance company, the date of submission must be proven, the insurance company's payment or rejection response must be awaited, and in case of incomplete payment or no response, arbitration or litigation proceedings should be initiated.

What happens if the insurance company makes an underpayment?

Insurance companies' depreciation payments may not always be accurate or sufficient. The most common reasons for underpayments include incorrect fault ratio calculations, underestimation of the vehicle's market value, misinterpretation of damage history, insufficient consideration of repair costs, incorrect assessment of vehicle mileage, or calculation of depreciation using only a limited formula.

In case of underpayment, the vehicle owner can claim compensation for the remaining depreciation. At this point, it is important that the payment from the insurance company is accepted with reservations, that any release form signed after payment is carefully examined, and that expressions implying "I have received all my rights" are avoided. Otherwise, it may become difficult to claim compensation for the remaining depreciation later.

Article 111 of the Highway Traffic Law stipulates that agreements that eliminate or reduce the legal liability foreseen by this Law are invalid; and that agreements or settlements regarding clearly insufficient or excessive compensation amounts may be annulled within two years from the date they were made.

Insurance Arbitration Commission Application

In vehicle depreciation disputes, the Insurance Arbitration Commission offers a faster resolution than going to court. Arbitration can be particularly practical for depreciation claims directed solely at compulsory motor insurance. However, if the case involves additional claims such as driver, operator, vehicle owner, optional liability insurance, or loss of vehicle life damages, litigation should be considered separately.

When applying to the Commission, the applicant must submit their identity document, proof of payment of the application fee, the insurance company's final response letter or proof of non-response, the application letter sent to the insurance company, a statement explaining why the claim was not met, and all documents supporting the dispute. The Commission also states that in applications made through a lawyer, the power of attorney must contain specific authorization.

The most important aspect of an arbitration application is presenting the claim in a concrete and documented manner. A general statement such as "my vehicle has depreciated in value, I want compensation" is not sufficient. The vehicle's value before and after the accident, the details of the damage, the degree of fault, the insurance company's underestimation, and the amount of outstanding balance requested must be clearly shown.

Vehicle Depreciation Claim

If the insurance company does not make a payment, makes an incomplete payment, or does not pursue arbitration, a lawsuit for vehicle depreciation can be filed. In this lawsuit, the defendants may include the negligent driver, vehicle operator, vehicle owner, insurance company, or other relevant parties depending on the specific circumstances.

In lawsuits filed against insurance companies, the competent court is most often the Commercial Court of First Instance. However, in tort-based lawsuits filed solely against the driver or vehicle owner, the issue of the Civil Court of First Instance may arise. In cases where the defendants are listed together, the issue of jurisdiction should be considered separately. Filing a lawsuit in the wrong court can cause the case to be prolonged due to lack of jurisdiction.

In terms of jurisdiction, Article 110 of the Highway Traffic Law is important. According to this article, lawsuits concerning legal liability arising from motor vehicle accidents can be filed in the court located where the insurer's headquarters or branch is located, or where the insurance contract was made by the agent, or in the court where the accident occurred.

Vehicle Deprivation Damage and Diminution in Value Are Not the Same Thing

Vehicle depreciation and vehicle loss should not be confused. Depreciation is the decrease in the resale value of a vehicle after repairs. Vehicle loss, on the other hand, is the damage incurred due to the vehicle being unusable while it is undergoing repairs. For example, the vehicle owner may have rented a replacement vehicle during this period or suffered a loss of income because they could not use their vehicle for commercial purposes.

In the general terms and conditions of mandatory traffic insurance, indirect damages such as loss of income, loss of profit, business interruption, and loss of rental income are excluded from coverage. Therefore, vehicle loss damages are often claimed not directly from the traffic insurance company, but from the negligent driver, operator, or vehicle owner according to general provisions.

This distinction is important from a litigation strategy perspective. If arbitration is filed solely with the insurance company, a favorable outcome may be achieved regarding the diminished value of the vehicle; however, for damages related to loss of vehicle use, a separate lawsuit may be necessary against the driver and the vehicle owner.

Statute of Limitations

Vehicle depreciation is a form of material damage arising from a motor vehicle accident. According to Article 109 of the Highway Traffic Law, claims for compensation for material 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 liable party, and in any case, ten years from the date of the accident. If the claim arises from an act punishable by law and the penal code prescribes a longer statute of limitations, this period also applies to claims for material compensation.

In traffic accidents involving material damage, it is crucial not to miss deadlines for claims regarding diminished value. Waiting after an accident with the thought that "an insurance claim has already been opened" can lead to a loss of rights. The insurance application, expert report, payment response, arbitration, and litigation process should be planned with deadlines in mind.

The Most Common Mistakes Made in Vehicle Depreciation

The most common mistake car owners make is settling for only paying the repair cost. However, even if the vehicle is repaired, the decrease in its resale value can be claimed separately.

The second mistake is accepting the initial payment from the insurance company as definitive and accurate. The insurance company's calculation may be incomplete. Before accepting this payment, the vehicle owner should have an independent appraisal done based on the vehicle's true market value.

The third mistake is not challenging the fault ratio. If an incorrect fault is assigned in the accident report, this directly reduces the compensation for diminished value. The fault ratio can be changed through camera footage, witness testimony, photos of the scene, and expert examination.

The fourth mistake is treating vehicle loss damages and depreciation damages as the same claim. These two damage categories are different and may have different parties involved.

The fifth mistake is submitting an application with incomplete documents. An incomplete application saves the insurance company time and prolongs the process. The application form should be clear, the documents complete, and the amount requested should be specific.

The sixth mistake is failing to conduct a legal assessment before signing a release or settlement agreement. Documents stating "I have no further claims" can make it difficult to claim the remaining balance later.

Conclusion

In traffic accidents, vehicle depreciation compensation is a significant form of financial compensation aimed at recovering the decrease in the resale value of a vehicle, even after it has been repaired. The vehicle owner can claim compensation for the depreciation by applying to the at-fault party's traffic insurance; in case of insufficient payment or rejection, they can apply to the Insurance Arbitration Commission or file a lawsuit.

When calculating depreciation, the vehicle's make, model, age, mileage, damage history, nature of the damage, repair method, and market value should all be considered. The insurance company's calculation may not always reflect the actual loss. Therefore, depreciation claims should be carefully prepared, especially for vehicles with significant damage, new models, low mileage, or no prior damage history.

A properly prepared vehicle depreciation claim should be supported by an accident report, fault assessment, expert report, service records, photographs, repair invoices, and market value analysis. Incomplete or incorrect applications may result in loss of rights or receiving a lower payment.

In conclusion, simply repairing a vehicle after a traffic accident is not enough. The vehicle owner also has the legal right to claim compensation for the decrease in the vehicle's resale value. To effectively exercise this right, the insurance application, depreciation calculation, arbitration, or litigation process must be managed correctly; and actions should be based not on the insurance company's initial offer, but on the vehicle's actual market value loss.