TOTAL LOSS VEHICLE AND TOTAL LOSS DIFFERENCE COMPENSATION

                                      TOTAL LOSS VEHICLE AND TOTAL LOSS DIFFERENCE COMPENSATION

1. DAMAGED VEHICLE

    The term "total loss" refers to vehicles that have sustained severe damage in traffic accidents, rendering them unusable. If an expert determines that the vehicle has suffered more than 70% damage, it can be classified as a total loss. Secondly, a vehicle is considered a total loss if the cost of repairs exceeds its insured value. In short, the term "total loss" is used for damages that are irreparable or, even if repair is possible, the repair cost exceeds the vehicle's value. Vehicles deemed severely damaged in this way are registered as total loss vehicles in traffic insurance records. If the vehicle has comprehensive insurance, the insurance company may cover the damage, but the owner must notify the insurance company within 5 business days of the accident, and the vehicle must be inspected by an expert sent by the insurance company within this period.

 2. PART DIFFERENCE COMPENSATION

     If a vehicle is definitively declared a total loss, insurance companies pay vehicle owners compensation for the difference in value. Two important concepts come into play when determining the amount of this compensation.

   The first of these is the market value of the vehicle. Market value refers to the market price of a used vehicle at the time of the accident.

    Another concept is salvage value. Salvage value is the price that would be obtained from the sale of a damaged vehicle. Insurance companies can only carry out this sale with the vehicle owner's consent.

   Compensation is calculated based on the market value of the vehicle. If the vehicle owner allows the sale of the vehicle and leaves the damaged vehicle entirely to the insurance company, there is no problem. However, if the vehicle owner wants to keep the vehicle as scrap, then the salvage value is deducted from the market value to determine the compensation, and this amount is paid to the vehicle owner. In practice, disputes arise between insurance companies and vehicle owners regarding the determination and payment of this amount. If vehicle owners believe that the market value has been calculated incorrectly, they have the right to object and file a lawsuit.

3. DISAGREEMENT ON THE AMOUNT OF COMPENSATION FOR THE DIFFERENCE IN TOTAL LOSS

   In practice, disagreements and objections regarding the amount of compensation are frequently encountered. If vehicle owners wish to object to the compensation amount, there are four different ways they can proceed

•   The first step is to object. Insurance companies first have vehicle owners sign a settlement agreement or release form before making a payment. If you believe the amount offered by the insurance company is insufficient, you must include a reservation of rights when signing these agreements. Failure to do so makes objection more difficult. After this reservation is made, the parties can object to the compensation amount.

•      After an objection, the next step for insurance companies is usually mediation. Mediation is a way to resolve the dispute. It involves reaching an agreement on the amount of compensation between the insurance company and the policyholder through a designated mediator. The importance of reaching an agreement here is that if the vehicle owner reaches an agreement with the insurance company through mediation, they can no longer pursue their right to sue for the disputed and insufficient amount. Therefore, if the parties still believe the compensation offer is too low, they should not accept the mediation offer to avoid losing their rights.

•      Thirdly, a lawsuit can be filed. If an agreement on the amount of compensation cannot be reached, an objection should first be raised, then the mediation offer should be examined, and if the offer does not satisfy the vehicle owners, then a lawsuit should be filed. It is advisable to seek professional legal support regarding how to file a lawsuit and the requirements.                                

•    Besides all of these options, drivers have another avenue: they can apply to the Insurance Arbitration Commission regarding their insurance disputes. The Insurance Arbitration Commission is an institution that ensures disputes are resolved by an independent arbitrator appointed by the Commission. The decisions of this Commission are equivalent to court decisions. Its advantages over filing a lawsuit include faster resolution of disputes and lower costs. When a dispute is referred to an arbitrator by the Insurance Arbitration Commission, the arbitrator is obliged to make a decision within 4 months. Appeals against the Commission's decisions are possible only if the value of the dispute exceeds 5,000 TL. Applications to the Insurance Arbitration Commission can also be made through a representative.