WHAT IS THE RELATIONSHIP BETWEEN VEHICLE DEPRECIATION, COMPREHENSIVE INSURANCE, AND MANDATORY LIABILITY INSURANCE? AND WHAT IS SALVAGE?

WHAT IS THE RELATIONSHIP BETWEEN VEHICLE DEPRECIATION, COMPREHENSIVE INSURANCE, AND MANDATORY LIABILITY INSURANCE? AND WHAT IS SALVAGE?

WHAT IS VEHICLE DEPRECIATION? AND WHAT IS THE RELATIONSHIP BETWEEN IT AND MANDATORY FINANCIAL LIABILITY INSURANCE?

The concept of vehicle depreciation refers to the reduced market value of a vehicle damaged in a traffic accident, after repairs, maintenance, etc., have been carried out. In short, it represents the loss in value of the vehicle as a result of the accident. Regarding how this depreciation is determined, as stated in the article of the General Conditions for Amendments to the General Conditions of Compulsory Motor Vehicle Liability Insurance published in the Official Gazette on December 4, 2021, upon request, it is determined by an insurance expert appointed by the institution according to the procedures and principles determined by the institution, and in accordance with the principles in Annex-1 of the General Conditions.

When we examine our legal system regarding this issue, we find that there is no clear definition of depreciation; however, when we look at various provisions and the provisions of the Compulsory Motor Vehicle Liability Insurance Law, it refers to the decrease in the value of a vehicle due to damage after an accident, as explained above.

When examining the compensation and liability for depreciation, we see that according to Article 1409 of the Turkish Commercial Code, in the event of an accident, the at-fault party's traffic insurance is responsible for covering the damage and loss resulting from the accident, and also for compensating for the depreciation in value, which can be directly considered a loss. Looking at Article 85 of the Turkish Road Traffic Law, it is evident that this provision can be related to depreciation: "If the operation of a motor vehicle causes the death or injury of a person or damage to property, and if the motor vehicle is operated under the name or business name of an enterprise or with a ticket issued by such an enterprise, the operator of the motor vehicle and the owner of the enterprise to which it belongs shall be jointly and severally liable for the resulting damage.".

When claiming compensation for diminished vehicle value, the question of "from whom to claim" arises. If the innocent party in the accident suffers a decrease in vehicle value, this decrease will be covered by the party that caused the accident or by that party's mandatory traffic insurance. Of course, for the full amount of the diminished vehicle value and damages to be claimed directly in this way, the party must be completely blameless in the accident. It should be noted that the amount of diminished vehicle value and damages claimed will vary depending on the degree of fault. The innocent party in the accident can claim compensation for diminished vehicle value by obtaining an expert report and filing a lawsuit against the at-fault party or by applying to the Insurance Arbitration Commission.

WHAT IS COMPREHENSIVE CAR INSURANCE (CASCO) AND WHAT ARE THE DIFFERENCES BETWEEN IT AND MANDATORY TRAFFIC INSURANCE?

Unlike mandatory traffic insurance, comprehensive car insurance (kasko) covers damages to your own vehicle resulting from an accident. Although sometimes confused with mandatory traffic insurance, it is not compulsory and there are no penalties for not having it. As mentioned above, while mandatory traffic insurance covers damages to the other party in an accident, comprehensive car insurance covers damages to your own vehicle. In short, comprehensive car insurance is a type of private insurance that provides security for the insured vehicle and covers certain risks. These risks include traffic accidents and resulting damages, theft or attempted theft of the vehicle, fire, and personal injuries. Comprehensive car insurance assumes full or significant responsibility for these damages, depending on the circumstances of the incident, and ensures that these situations are covered. Another difference from traffic insurance is the cost of comprehensive car insurance. While traffic insurance premiums are standardized due to being determined by the state, the amount for comprehensive car insurance varies depending on the situations covered by the insurance. Since comprehensive car insurance is a more comprehensive type of insurance than traffic insurance, it is more expensive compared to traffic insurance. In terms of duration, they are similar; both types of insurance have a term of one year and must be renewed or activated annually upon payment.

SALVAGE, SALVAGE PRICE AND SALVAGE PROCESS

Salvage value is a concept particularly encountered in comprehensive car insurance. It refers to the sale of damaged property with the insured's consent. Salvage reduces the insurance company's expenses and losses. The salvage value lowers the compensation the insurance company has to pay, and if the damage isn't fully covered, it reduces the amount of compensation payable. As mentioned above, the insured's consent is required for salvage. If consent is given, the damaged property becomes the property of the insurance company and is sold. Payment is then made between the insured and the company according to established procedures. The income obtained from the undamaged parts of the damaged property is deducted from the compensation amount the company has to pay. This deducted amount is called the salvage value. The calculation of the salvage value includes all factors such as the initial price of the damaged property, its depreciation, its value, and the income from the sale. This salvage value is determined by an expert appraisal report, and the amount stated in this report is paid to the insured by the insurance company.

HUSEYIN DOGAN