An insurance relationship is truly tested not when the contract is signed but, in most cases, when a loss occurs. An exclusion in the policy, how the duty of disclosure was fulfilled or when the loss was notified may determine whether the claim is paid. The core rules on insurance contracts are Articles 1401 et seq. of Turkish Commercial Code No. 6102 (TTK); the institutional and regulatory framework of the sector is set by Insurance Law No. 5684. The sector is supervised by the Insurance and Private Pension Regulation and Supervision Agency (SEDDK).
The contract and the duty of disclosure
The policyholder must disclose, when the contract is made, all circumstances known to it that would have caused the insurer not to make the contract or to make it on more onerous terms. Breach of this duty may allow the insurer to withdraw from the contract or claim a premium difference; after a loss, it may lead to a reduction of the indemnity. The relationship between general and special conditions, whether exclusions were clearly notified to the insured, and the interpretation of ambiguities against the insurer are frequently debated in disputes.
Claims and indemnity
After a loss occurs, the insured must notify the insurer without delay and take the measures necessary to mitigate the loss. The insurer pays after completing the examinations needed to determine the indemnity. Under TTK Art. 1420, claims arising from an insurance contract are time-barred two years after the claim becomes due and in any event six years after the insured event occurs (subject to TTK Art. 1482 on direct actions in liability insurance and the limitation provisions of special laws). For this reason, the limitation period should be monitored separately where claims investigations are prolonged.
In disputes, insured persons may, besides going to court, apply to the Insurance Arbitration Commission established by Article 30 of Law No. 5684. Application to the Commission depends on the insurer being a member of the system and on a prior application having been made to the company. An objection procedure is provided for decisions exceeding a certain amount.
Recourse and subrogation
An insurer that pays the loss is subrogated, to the extent of the indemnity paid, to the insured's rights against third parties liable for the loss. In recourse actions brought on this basis, the liable person's defences may be raised against the insurer to the same extent as against the insured. In transport, construction and fire losses, recourse actions require technical expert examination to determine where liability lies.
Compulsory insurance
Compulsory motor third-party liability insurance is governed by Highway Traffic Law No. 2918, and compulsory earthquake insurance by Disaster Insurance Law No. 6305. In compulsory insurance, indemnity limits and general conditions are set by administrative regulations and updated periodically. In compensation claims arising from traffic accidents, the requirement to apply to the insurer before filing an action should also be observed.
Reinsurance
Reinsurance agreements are contracts under which the insurer transfers part of the risk it has assumed to a reinsurer, and they are mostly international in nature. In these agreements, the governing law, the arbitration clause, claims notification procedures and sector-specific principles such as "follow the fortunes" are decisive in a dispute. Regulatory notification obligations should also be taken into account when working with foreign reinsurers.
Our firm's work in this sector
We review policies and general conditions, conduct litigation and arbitration in claims disputes and recourse actions, and carry out contract and compliance work for companies in the sector. This work draws on our practice in Dispute Resolution, Commercial and Corporate Law, Construction Law and Personal Data Protection.
Main topics
- Insurance contracts and policy conditions (TTK Art. 1401 et seq.)
- Claims and payment disputes
- Recourse and subrogation actions
- Compulsory insurance (motor third-party liability, earthquake)
- Insurance Arbitration Commission procedures
- Reinsurance agreements and regulatory compliance
Frequently asked questions
What can I do if the insurer does not pay my claim?
A written application should first be made to the insurer. If this produces no result, you can apply to the Insurance Arbitration Commission, if the company is a member, or file an action in court.
When does my insurance claim become time-barred?
Under TTK Art. 1420, claims arising from an insurance contract are time-barred two years after the claim becomes due and in any event six years after the insured event occurs (subject to TTK Art. 1482 on direct actions in liability insurance and the limitation provisions of special laws).
The insurer never told me about the exclusion in the policy. Does it still apply?
Whether exclusions were clearly notified to the insured and appear in the policy in an understandable way is important for their applicability. Ambiguous provisions are, as a rule, interpreted against the insurer.
What is a recourse action?
It is an action brought by an insurer that has paid a loss to recover the amount paid from the third party liable for the loss. In this action, the insurer stands in the shoes of the insured.
Can I challenge the indemnity amount set by the insurer's loss adjuster report?
Yes. You should first send the company your reasoned objection to the report in writing, together with documents such as repair invoices and any independent loss assessment report. If this produces no result, you can apply to the Insurance Arbitration Commission if the company is a member of the system, or to the court if it is not. The scope of any release signed when accepting payment may affect whether you can claim the difference later, so it should be read carefully before signing.
Legislation and sources
- Turkish Commercial Code No. 6102 (in Turkish)
- Insurance Law No. 5684 (in Turkish)
- Disaster Insurance Law No. 6305 (in Turkish)
- Insurance and Private Pension Regulation and Supervision Agency
The information on this page is general and does not constitute legal advice. As legislation may change, the current rules must be assessed separately for your particular situation.