Traffic Insurance and Legal Solutions

Before explaining car insurance in detail and clearly, I need to explain the concept of insurance itself. Because car insurance is the most common type of insurance in our country, people generally have misconceptions about it. In this article, I will first examine the definition and elements of insurance from the perspective of car insurance. I will also discuss the definition, sources, and scope of car insurance. Finally, I will explain potential problems related to car insurance with illustrative examples and offer legal solutions. I hope you enjoy reading.

            Insurance law is a complex branch of law that regulates both the rules governing insurance contracts and the activities of legal entities engaged in insurance operations. Insurance arose from individuals' desire to secure themselves against anticipated future events that could cause damage to their assets. Insurance is a system of security. We must examine traffic insurance under this branch of law.

            Six elements are necessary for the establishment of an insurance system. Let's examine these within the scope of traffic insurance:

1. Persons at risk element
2. A traffic accident is a dangerous situation. It affects people both in terms of property and personal safety. Let me explain with an example: when a traffic accident occurs and the other party's vehicle is damaged, their property is also endangered. Even worse, the other party's physical integrity may be harmed. Therefore, our first element is the personal factor necessary for the incident to occur.

2. Risk factor

• Risk is a fundamental concept in insurance law. It refers to the occurrence of any event that could give rise to a liability for compensation. Let's continue with our example. When a traffic accident occurs, the damage caused to the other party is compensated. This risk element is what constitutes compensation for this dangerous situation.

3. The element of the risks being the same and similar

• Even in the origin story of insurance, this element has united people. The idea that people should seek compensation for damages in similar situations emerged with the London Fire. If we examine this common idea from the perspective of traffic insurance, there are nearly thirty million vehicles in Türkiye today. The damages that these vehicles will cause as a result of accidents are similar or on the same scale. There is also the matter of profit for insurance companies. There must be multiple people involved for insurance companies to make a profit.

4. Insurance coverage element

• Compulsory traffic insurance provides coverage and compensation for losses incurred as a result of accidents, natural disasters, or other adverse events. Compulsory traffic insurance coverage limits are determined by the Insurance and Private Pension Regulation and Supervision Authority (SEDDK) based on the vehicle's specifications. This coverage insures against material and bodily harm caused by the negligent party to the other party in the event of an accident, as well as medical expenses, including disability and death, within certain limits. In the case of an accident, if the compensation for the resulting damage exceeds the insurance coverage limit, the insurance company will only pay up to the coverage limit. The remaining damage cost is paid by the insured and the injured third party. There is a common misconception that when people purchase traffic insurance, they assume the insurance company will cover all potential damages, but this is not the case.

5. Premium element

• The premium is the monetary amount that forms the basis of the compensation or payment to be made when a risk occurs. An insurance premium is the money paid by the insured to the insurer as compensation for the insurer's obligation to bear the risk. Insurance premiums can be paid in kind or in cash, but in-kind payment is rare. According to the Turkish Commercial Code, cash payment is the primary method. This premium is calculated taking into account factors related to the vehicle, such as the model, the province of residence (license plate number), and the vehicle's damage history. In our accident example, the compensation to be paid after an accident is covered by these premium payments. For example, if the accident results in the death of the other party, the other party's heirs may claim compensation for loss of support. This is where the paid premiums come into play. I would also like to emphasize a common misconception: insurance companies do not cover the entire loss. They only compensate for the losses covered by the insurance policy.

6. The insured must have the right to claim in order to benefit from the protection

• When a potential loss occurs, it should be determined whether the loss is covered by the insurance policy. This is because insurers do not cover every risk; they provide coverage based on the type of risk. In this case, the individual should have the right to claim the coverage.

Finally, let's define insurance within the framework of the information I've provided in this first section:

Insurance is a legal right granted to individuals exposed to the same or similar risks, providing them with coverage for their needs arising from the occurrence of that risk, in exchange for a specific premium.

Traffic insurance is a type of insurance that covers damages that may occur to the other party in accidents while driving on public roads. It is a policy that insures the vehicle owner against damages caused to third parties or other vehicles as a result of an accident.

Traffic insurance is a mandatory insurance policy within the scope of liability insurance. It is regulated by the Highway Traffic Law No. 2918, the Commercial Code No. 4721, and related texts. To better understand it, let's explain these three concepts.

• Property insurance aims to compensate for any damage to assets resulting from an insured risk, and this compensation constitutes the subject of the insurance contract.
• Liability insurance is arranged to protect against losses arising from workplace accidents, damage to commercial products, and liabilities arising from occupational conditions.
• Compulsory insurance policies are legally required to protect both the policyholder and third parties from risks, as well as to ensure public safety.

After providing conceptual explanations about traffic insurance, let's now evaluate its scope in our daily lives and explain it with examples. While doing this, I will explain the concepts and situations that people often confuse, point by point, using illustrative examples.

What is NOT covered by motor vehicle insurance?

Just as the instruction manual for a product often focuses more on what not to do than what to do, I'll follow the same approach here. After all, when buying car insurance, we can think of it as a product.

1. Compulsory Motor Insurance ≠ Comprehensive Motor Insurance

These two concepts are perhaps the most confusing for people regarding traffic insurance. Traffic insurance covers damage to the other party's vehicle, as well as bodily and material damage to others (third parties). Comprehensive (kasko) insurance, on the other hand, only covers damage to your own vehicle. In the event of an accident, you cannot claim damage to your own vehicle under traffic insurance. This damage will be covered by comprehensive insurance.

II. It does not cover damages you have caused to your close relatives in a traffic accident.

Specifically, damage to vehicles belonging to spouses and children is not covered here. This is because traffic insurance covers damages to vehicles belonging to third parties. Since close relatives do not fall into the category of third parties, damages caused to them are not covered.

III. Non-pecuniary damages are not compensated

Even though people might think they can claim compensation for non-pecuniary damages in any matter, this is not the case for traffic insurance.

IV. It does not cover loss of income

Let's say you hit a taxi, and the taxi is out of service for five days. This results in a five-day loss of income. The insurance company won't cover this loss. The damages will be claimed from the person who caused the damage.

V. Damages occurring within the site are not covered.

The crucial factor here is whether or not there is a road within the site. This is highly unlikely. Therefore, damages occurring within the site are not covered. This is because traffic insurance is designed to cover damages occurring on public roads.

The following points are covered by traffic insurance, but there is a possibility of recourse. Recourse refers to a person's right to withdraw from their obligations. This concept, applicable to both legal and private entities, also includes insurance companies. For an insurance company to be able to waive its contractually defined duties, a recourse claim must be filed.

VI. If the person did not have a driver's license at the time of the accident, or if their driver's license had been revoked, the resulting damages will be compensated by the insurance company. Subsequently, the insurance company will seek recourse from the individual to recover the compensation paid through legal means.

VII. If an accident occurs while driving under the influence of alcohol, the resulting damages are compensated by the insurance company. Subsequently, the insurance company seeks recourse from the individual for the compensation paid, through legal means.

VIII. If a person knowingly and intentionally commits a grossly negligent act at the time of an accident, the insurance company will seek recourse from that person after paying the compensation for the damage. An example of such a grossly negligent act is knowingly and intentionally driving the vehicle against the flow of traffic.

IX. If an accident occurs while the vehicle is carrying passengers and cargo exceeding its limit, and an expert determines that the cause of the accident is due to this situation, the insurance company will pay the damages. Later, the company will seek reimbursement from the individual for the compensation paid.

Regarding the method of determining compensation, the following explanation is provided:

      “Traffic insurance is a type of liability insurance. Therefore, compensation is determined based on fault and the degree of fault. In cases of damage to individuals, the amount of compensation is determined by the person's age, average income, and the ages of dependents. In cases of damage to vehicles, the amount of compensation determines the damage sustained by the vehicle.”

 Now, in the final section, we will examine how the legal solutions to the problems that may arise can be determined. In the event of a traffic accident, regarding the insurance aspects of the resulting damages, we are presented with two options:

1. Arbitration Method
2. Arbitration has gained significant importance within our legal system today. In insurance law, too, recourse to arbitration has increased due to its benefits.
3. Below I have listed the most important reasons for resorting to arbitration:
4. Short arbitration duration: The arbitration system, with its unique characteristics, allows for proceedings to be completed in a shorter time compared to court proceedings. Since a shorter duration means minimizing the risk of loss of rights, arbitration is preferred.
5. Low cost: Arbitration systems designed to protect consumers have very low costs. There is an application fee to prevent abuse and unnecessary applications.
6. The arbitration process is handled by experts: Arbitrators are selected by individuals who are experts in the relevant field. This ensures that each dispute is resolved by a person who is an expert in that area.
7. The arbitrator's decisions are final: With certain limitations, the arbitrator's decisions are definitive. This shortens the process, ensuring the injured party receives their due compensation sooner.
8. For arbitration to be possible, the dispute must first be eligible for arbitration. Disputes arising from insurance contracts between the insured or beneficiaries of the insurance contract and the party assuming the risk can be brought to arbitration.
9. The person authorized to apply for arbitration is the insured or beneficiary, who are the policyholder or the beneficiaries of the insurance contract.
10. Insurance companies and the guarantee fund can be sued in insurance arbitration.
11. In this type of arbitration, the application is made directly to the arbitration commission. The application must be submitted directly to the headquarters of the Insurance Arbitration Commission or to the office located where the applicant resides or where the risk occurred.
12. Following an application to the Insurance Arbitration Commission, commission officials appoint a rapporteur to conduct a preliminary examination of the dispute and verify the existence of the preconditions listed in the regulations. After the rapporteur's examination, which will be completed within fifteen days, the file, along with the preliminary report prepared by the rapporteur, is forwarded to the selected arbitrator or arbitration panel. Arbitrators are required to complete the proceedings within four months from the date of their appointment by the commission; however, this period may be extended with the written consent of the parties.
13. The only method prescribed for challenging arbitration decisions is the "annulment lawsuit." A decision is reached after a two-stage review process.

2. Legal Recourse

In this process, we encounter compensation lawsuits. Compensation lawsuits are divided into two categories: claims for material damages and claims for moral damages. We cannot file a claim for moral damages under traffic insurance. We can only file a claim for material damages and seek compensation for our losses in this way.

• Monetary Compensation Lawsuit

A lawsuit for pecuniary damages is filed when one person unlawfully and negligently causes harm to another, and this harm is material. In insurance law, when filing a pecuniary damages lawsuit, we have the right to claim compensation for the items listed below.

We have the right to claim financial compensation from insurance companies, the vehicle owner, and the driver, depending on the circumstances of the situation.

1. Property damage: Let's say a traffic accident occurs. In this case, the car will also be damaged. We can claim compensation for this property damage from insurance companies.
2. Diminution in value: In the event of a traffic accident, the damaged vehicle suffers a decrease in value. We can claim compensation for this loss from the insurance company.
3. Loss of Rights: When a taxi is involved in a traffic accident and the vehicle is damaged, it may become unusable for a certain period. In this case, the driver can claim compensation for the lost rights. The important point here is that insurance companies will not cover this damage. If insurance companies cover this damage, they will recover the value of the damage from the person who caused the damage through legal means. This damage is borne by the vehicle's operator or driver.

4. Injury status (disability)

• Permanent disability compensation: A person can claim this compensation if the disability they suffered will affect them for the rest of their life. This determination of permanent disability is made solely based on a doctor's report.
• Temporary disability compensation: It would be more accurate to call this period the recovery period. The individual can claim compensation for the damage suffered during this recovery period. The decision is made based on a doctor's report.
• Caregiver compensation: If a person needs a caregiver in the event of an injury, they can request compensation for that damage.

5. Death situation

• Compensation for loss of support: In the event of a person's death, those who were dependent on them suffer a certain loss. In this case, they can claim compensation for this loss.
• Death expenses: Expenses such as funeral expenses can be claimed under this category.

Finally, I would like to explain the litigation process. The competent court for such cases is the Civil Court of First Instance. If the lawsuit is against an insurance company, the Commercial Court of First Instance has jurisdiction. In lawsuits for material and moral damages arising from traffic accidents resulting in death or injury, there are multiple competent courts, as listed below.

• Court of the defendant's place of residence
• court of the place where the traffic accident occurred
• Court of the plaintiff's place of residence
• The court of the place where the traffic insurance company's headquarters are located

Multiple local courts may have jurisdiction in a compensation case, and the plaintiff has the right to choose which court to file.

I conclude this writing by explaining both legal avenues for resolution. I hope it has been helpful and answered your questions. Remember that each case is evaluated within its own context. For more detailed information and to manage the process, you can contact our office.