As a result of damage to a vehicle caused by any accident, even if the vehicle is repaired, the decrease in the vehicle’s value is called loss of value. In traffic accidents causing material damage, the depreciation of your vehicle’s value in the second-hand market is also a form of loss of value. Even if the vehicle is repaired flawlessly after the accident, its sale price will be lower than the price determined before the accident. Factors affecting vehicle loss of value can be listed as follows: the extent of the damage to the vehicle, the cost of replaced parts, the amount of damage, the accident record (tramer), the market value before the accident, and the vehicle’s mileage.
For example, imagine you have a 2010 model vehicle with no damage. You bought this vehicle second-hand for 400,000 TL. The vehicle is involved in a traffic accident causing material damage. As a result of the accident, the hood and front fenders of your vehicle are replaced. When you try to sell your vehicle, you cannot get more than 370,000 TL. The difference between the purchase and sale price is the vehicle’s loss of value. Your vehicle loss of value is 30,000 TL.
According to Article 1409 of the Turkish Commercial Code, in case of loss of value resulting from a traffic accident, the traffic insurance of the party at fault in the accident is responsible not only for compensating the damage and loss caused by the accident but also for covering the loss of value, which is accepted as a direct damage.
A) من أين/من يمكنني طلب تعويض فقدان قيمة السيارة؟
You can claim the loss in value of your vehicle from the traffic insurance, the registered owner, or the driver of the vehicle that hit you. The injured party can demand compensation for their loss from the insurance company of the at-fault vehicle owner. The relevant insurance company is obligated to respond to the injured party’s written application within 15 days. If the company fails to compensate the injured party fully or only partially compensates within this period, the injured party can seek compensation through arbitration or legal action.
In the case of commercial vehicles involved in traffic accidents, the income lost due to the vehicle not being restored to its previous condition is referred to as loss of commercial profit.
B) Is there a time limit to claim the vehicle’s loss of value, and what are the necessary conditions?
An application must be made within 2 years from the date of the accident. However, a totaled (written-off) vehicle cannot claim loss of value. The person claiming the loss of value must be completely without fault in the accident or not fully at fault. The amount of loss of value compensation will be affected in proportion to the degree of fault.
1- Condition of No Fault
Not every vehicle involved in a traffic accident suffers a loss in value. The first condition for a loss in value to occur is that the vehicle involved in the accident must be either not at fault or not fully at fault for the accident.
If the vehicle is not at fault, the owner can claim the full amount of the loss in value. If the vehicle is not fully at fault, the owner can claim the loss in value proportionate to their degree of fault.
2- Denial of Loss in Value and the Claim for Loss in Value Arising from Traffic Accidents?
If you are also at fault in the accident, your vehicle’s loss in value will be calculated taking your degree of fault into account. However, in unexpected situations, the insurer of the party found at fault may refuse to cover the costs. In such cases, it is necessary to apply to the competent courts or the insurance arbitration commission. This is because the comprehensive insurance company functions to cover the expenses incurred in accidents.
As a vehicle owner, even if you repair or replace the damaged parts of your vehicle with original parts after the accident, your car will still be recorded as a ‘faulty vehicle’. However, being the innocent party in the accident and repairing your car properly does not mean you have to accept a loss due to the depreciation in your vehicle’s value. A completely faultless vehicle owner can claim compensation for the loss in value from the owner of the faulty vehicle or the vehicle’s registered owner through the courts. Another right of the innocent driver is to apply to the insurance company to cover their damages.
The second option with insurance companies is the mandatory traffic insurance; loss in value covered under vehicle insurance can also be compensated by insurance companies this way. However, to cover the damage, some companies rely on an expert report, while others may require a lawsuit to be filed first. In any case, to avoid loss in vehicle value and minimize material damage, it is essential to have traffic insurance and comprehensive (kasko) insurance.
3- Where Is the Compensation for Vehicle Depreciation from Traffic Accidents Collected?
The traffic insurance policies we purchase every year (Compulsory Liability Insurance) include coverage for depreciation within the premiums we pay. This coverage comes into effect when we cause an accident and damage another vehicle, compensating for the depreciation resulting from the accident.
4- How and When to Apply
The necessary documents when an accident occurs are:
- Accident Report (If not available, reports prepared by judicial authorities or other documents)
- Driver’s License
- Copy of Vehicle Registration
- Damage Photos
- Claim Petition
- These documents are submitted to the insurance company of the at-fault vehicle.
Applications can be submitted to the insurance companies’ email addresses online or via registered mail with return receipt. If the insurance company does not respond within 15 days for insurance claims, or within 15 business days for comprehensive insurance claims, or if the claim is rejected, an application can be made to the Insurance Arbitration Board or a lawsuit can be filed in the competent court.
Lawyer’s Warning
- Citizens can apply to arbitration individually. However, during the trial process, the method and procedure of application, obligations related to interim decisions, expert reports, and objections to these reports make it important for the trial to be conducted through a lawyer to prevent loss of rights for the citizens.
Supreme Court of Appeals, 17th Civil Chamber, Case No: 2016/19642, Decision No: 2017/10599, Date: 15.11.2017
“…The depreciation of the vehicle should be calculated based on the difference between the fair market value of the undamaged second-hand vehicle as of the accident date, considering the vehicle’s age, features, extent of damage, characteristics of damaged parts, and any prior accidents, and the fair market value of the repaired vehicle after the accident. In this case, the court should have obtained a new expert report in light of the principles explained above to determine the vehicle’s depreciation and decided accordingly. It was deemed incorrect to base the judgment on an insufficient expert report and issue a written decision accordingly…”
Supreme Court of Appeals, 4th Civil Chamber, Case No: 2021/2043, Decision No: 2021/6867, Date: 14.10.2021
“…Following the trial of the material compensation lawsuit arising from the traffic accident between the parties: … the depreciation damage was determined based on the difference between the undamaged second-hand market value of the vehicle before the accident and the second-hand market value after the accident and repair. To resolve potential inconsistencies, a detailed, reasoned, and reviewable new report was obtained from a mechanical engineer. Subsequently, all evidence in the file was evaluated together, and a decision was made accordingly. … Within the scope of the annulment, the depreciation of the vehicle was calculated by the expert mechanical engineer; the rental contract between the defendant … Automotive and … Auto Rental Tourism Inc., as well as the parties’ ledgers, were examined by a financial expert accountant… The ruling was appealed by both the plaintiff’s attorney and the defendant’s attorney. … Considering the documents in the file, the suitability of the decision for annulment, and the absence of any error in the evaluation of the evidence, all unfounded appeals by the parties’ attorneys were rejected, and
the ruling, being in accordance with procedure and law, was UPHELD by unanimous decision.”
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