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Voluntary Financial Liability (VTL) Insurance: In Which Cases Does It Come into Effect?

Entrance

Most vehicle owners who purchase traffic insurance believe they are only covered under Compulsory Financial Liability Insurance (ZMSS) . However, in practice, in some traffic accidents, the insurance limits are insufficient to cover the amount of damage. This is where Optional Financial Liability (İMM) coverage comes into play.

The mandatory insurance coverage provides protection against damages exceeding the limits of compulsory insurance. The purpose of this coverage is to protect the driver and vehicle owner from financial liability to third parties . However, the mandatory insurance coverage does not apply in all cases; certain conditions must be met.

This article will examine in detail the legal basis , application conditions , circumstances under which it applies , and limitations of the IMM guarantee in light of Supreme Court decisions

1. Definition and Legal Basis of Optional Financial Liability Insurance

1.1. Definition

Voluntary Financial Liability (FML) is a coverage added to a comprehensive car insurance policy . The insurance company undertakes to pay compensation to the insured or the business owner for damages exceeding the Compulsory Motor Vehicle Liability (CMLL) limits.

In other words, the IMM guarantee is a continuation of the ZMSS; however, it is optional, not mandatory.

1.2. Legal Basis

• Articles 85-91 of the Highway Traffic Law No. 2918
  regulate the liability of motor vehicle operators to compensate for damages they cause to third parties.
• General Terms and Conditions for Compulsory Motor Vehicle Liability Insurance:
  The scope and coverage limits of the Compulsory Motor Vehicle Liability Insurance are defined.
• , IMM (Internal Mechanism of Insurance) coverage by insurance companies through special clauses .

2. The Difference Between ZMSS and İMM Guarantee

IMM (Internal Control Mechanism) only comes into effect if the damages exceed those covered under ZMSS (Compulsory Motor Insurance). Therefore, in the event of an accident, compulsory insurance kicks in first, and then IMM coverage is applied for the remaining damage.

3. Types of Damages Covered by IMM Insurance

IMM coverage typically covers three main loss categories:

1. Material Damages:
   Damage to a third party's vehicle, belongings, or real estate.
   (For example, the insured vehicle colliding with a parked vehicle.)
2. Bodily Injury:
   Injury or death to third parties.
   (For example, death or permanent disability resulting from hitting a pedestrian.)
3. Non-pecuniary damages:
   Claims for non-pecuniary damages made by relatives in cases of death or serious bodily harm.

The 17th Civil Chamber of the Supreme Court of Appeals, Case No. 2016/10458, Decision No. 2017/8421, stated:
“The Intangible Motor Insurance coverage includes bodily and material damages exceeding the Compulsory Motor Insurance Limit; unless otherwise agreed in the insurance policy, it may also include non-pecuniary damages.”

4. Cases in Which IMM Guarantee Comes into Effect

4.1. Exceeding the ZMSS Limit

The most typical situation the mandatory insurance limit is insufficient .
For example;

• The per capita bodily harm limit for compulsory motor insurance (ZMSS) for the year 2025 is 1,500,000 TL.
• If a death in an accident results in a compensation award of 2,500,000 TL,
  • ZMSS will pay 1,500,000 TL
  • The remaining 1,000,000 TL will be covered by the insurer under the IMM (Insurance and Maintenance) coverage

This practice "complementary responsibility" .

4.2. Extension of Damages Up to the Policy Limit

The Insured Vehicle Insurance (IPM) coverage provides protection up to the limit agreed upon between the insured and the insurer.
If the comprehensive insurance policy has an IMM limit of 500,000 TL, the insurer will only pay up to this amount.
The portion exceeding the limit is the responsibility of the vehicle owner.

Supreme Court 17th Civil Chamber, Case No. 2018/2331, Decision No. 2019/6039:
“Insurance coverage is limited to the limit specified in the comprehensive insurance policy; damages exceeding this amount are the responsibility of the insured.”

4.3. Accidents in Which the Insured Vehicle is at Fault

The Insured Vehicle Insurance (IPM) only applies in accidents where the insured vehicle is at fault . If the insured is not at fault, the insurance company has no obligation to pay under the IMM.

4.4. Damage to Third Parties

IMM covers damages to third parties , not the insured or vehicle owner . Damages to the driver and their relatives in the vehicle are generally excluded from coverage.

5. Cases Where IMM Guarantee Does Not Apply (Excluded from Guarantee)

IMM coverage is not applied in all cases. exclusions :

1. Damages Caused Deliberately (Turkish Commercial Code Article 1446):
   If the accident was caused intentionally, the insurer will not make a payment.
2. If the insured is under the influence of alcohol or drugs:
   In this case, both ZMSS and İMM coverage are invalidated.
3. Activities such as racing, rallying, and speed trials:
   Accidents occurring during commercial or sporting activities are generally excluded.
4. Damages Incurred by Relatives of the Insured:
   Unless specifically stated otherwise in the policy, damages caused to close relatives such as spouse, children, and siblings are excluded from coverage.
5. Driving by unauthorized persons:
   Accidents caused by unlicensed drivers are not covered by the IMM (Instrument for the Protection of Vehicles).

The 17th Civil Chamber of the Supreme Court of Appeals, Case No. 2017/10333, Decision No. 2018/12456:
“Damage resulting from a traffic accident caused by the insured while under the influence of alcohol cannot be assessed within the scope of the Insured Person's Insurance Coverage Policy.”

6. The Practical Importance of IMM Guarantee

6.1. Increased Compensation in Traffic Accidents

In recent years, courts have been awarding high compensation in traffic accidents, particularly in cases of death and permanent disability . These compensations often exceed the limits of mandatory insurance.

IMM insurance provides legal and financial protection against such high compensation risks .

6.2. Protection of Property

In a traffic accident, the compensation amount can reach millions of Turkish Lira. A driver without IMM (Internal Control Mechanism) coverage will have to pay for damages exceeding the limit from their own assets. Therefore, insurance experts recommend that every vehicle owner add IMM coverage to their vehicle

7. IMM Guarantee in Light of Supreme Court Decisions

• Supreme Court 17th Civil Chamber, Case No. 2016/3125, Decision No. 2017/5642:
  

  “Optional Financial Liability coverage covers damages exceeding the Compulsory Motor Insurance (CMSI) limit. The CMSI coverage does not activate until the CMSI limit is reached.”

• Supreme Court 17th Civil Chamber, Case No. 2018/8754, Decision No. 2019/9333:
  

  “The IMM policy covers damage to a third party; it does not apply to damage to the insured's own vehicle.”

• Supreme Court 11th Civil Chamber, Case No. 2019/3456, Decision No. 2020/6021:
  

  “IMM coverage is limited to the limits and conditions stated in the policy. Unless otherwise agreed, the insurer's liability cannot be extended.”

These precedents reinforce the complementary nature of IMM ( Internal Control Mechanism) in insurance practice

8. Legal Processes with IMM Guarantee

A third party who wishes to file a compensation claim following an accident should follow these steps:

1. First, an application is made to the ZMSS insurer.
2. If the damage exceeds the ZMSS limit, the IMM coverage in the comprehensive insurance policy will be relied upon.
3. If the insurance company rejects the claim,
   • to the Insurance Arbitration Commission .
   • Alternatively, a lawsuit can be filed in the Commercial Court of First Instance.

During the trial, the court determines both the degree of fault and the amount of damages through expert examination.
If there is insurance coverage, the insurer is ordered to pay within the limit.

9. Advantages of IMM Guarantee

• It provides additional assurance in situations where the ZMSS limit is insufficient.
• It protects the driver and operator from the risk of personal bankruptcy.
• In court proceedings, the insurance company can be a direct defendant.
• It prevents significant financial burdens in costly accidents (death, permanent disability).

In practice, many people have been able to transfer hundreds of thousands of liras in losses to the insurer thanks to the IMM (Internal Control Mechanism) coverage added to the policy for a small additional premium.

10. Practical Tips for Policyholders

1. When purchasing car insurance, be sure to include IMM (Internal Mechanism of Life) coverage.
2. When setting limits, act according to the current ZMSS limit and potential risks.
3. Update your coverage amounts each year when you renew your policy.
4. Be aware of exclusions from coverage such as alcohol, driving without a license, and intentional driving.
5. In case of an accident, open a damage claim file immediately and check the expert's report.

Conclusion and Evaluation

Optional Liability Insurance (OLI) coverage is one of the most important complementary elements of the modern insurance system.
It protects the insured and the vehicle owner against damages exceeding the limits of mandatory traffic insurance.

However, for this guarantee to become active:

• ZMSS limit reached,
• The accident caused damage to third parties,
• The policy must include an IMM clause
  .

For a small additional premium, IMM (Insurance and Maintenance) eliminates significant financial risks. Therefore, for every vehicle owner to have IMM coverage in their insurance policy, both for financial security and legal protection.