What general rules, requirements and procedures govern the filing of insurance claims?
The filing of insurance claims is governed by the relevant provisions on insurance contracts in the Commercial Code. The policyholder must:
- notify the insurer without delay when it becomes aware of the materialisation of the risk; and
- provide the insurer with all information and documentation required to determine the extent of the risk and indemnity.
Depending on various conditions, any delay in the filing of the claim may give the insurer the right to make a deduction on the indemnity amount or refrain from paying the indemnity altogether.
What is the time bar for filing claims?
Pursuant to Article 1446 of the Commercial Code, the policyholder must notify the insurer without delay when it becomes aware of the materialisation of the risk before the expiration of the time limit. However, if the amount of the claim increases due to the failure or delay in giving notice of the materialisation of the risk, the insurer may reduce the total amount of damages. All claims arising from insurance contracts must be filed within two years of the date when payment falls due. In any event, all claims relating to an insurance indemnity or insurance sum must be filed within six years of the date of materialisation of the risk. This period is extended to 10 years for liability insurance.
Denial of claim
On what grounds can the (re)insurer deny coverage?
The insurer may deny a claim if it concludes from the provided documents and information that the claim does not fall under the scope of the coverage. The insurer must act in accordance with the good-faith rule under Article 32 of the Insurance Law. According to this provision, (re)insurers must:
- refrain from acts which may endanger the rights and benefits of the insured;
- act in accordance with the legislation and principles of the business plan; and
- behave in compliance with the requirements of insurance and the rules of goodwill.
If materialisation of the risk is intentionally caused by the policyholder, the insured or the beneficiary (or persons whose acts these persons are liable for), the insurer will be discharged from liability and will not reimburse the premiums paid as per Article 1429 of the Commercial Code.
Similarly, if the claim is filed after expiry of the prescribed period, the insurer may deny the claim.
What rules and procedures govern the insured’s challenge of the denial of a claim?
The insured may apply for arbitration with the Insurance Arbitration Commission or bring a lawsuit against the insurer claiming that its damages fall under the scope of the coverage and that the indemnity should be paid.
If there is a prior agreement between the parties pertaining to another form of arbitration, the insured may challenge the denial of a claim by applying for such arbitration.
The insured may also apply to the Arbitration Committee for Consumer Problems pursuant to the Law on the Protection of Consumers (6502).
On what grounds can a third party file a claim directly with the (re)insurer?
For liability insurance, the claimant may claim its loss directly from the insurer as per Article 1478 of the Commercial Code.
Are punitive damages insurable?
Pursuant to Article 1404 of the Commercial Code (titled “Invalid Insurance”), insurance taken out to cover a loss resulting from an act of the policyholder or insured in breach of the mandatory rules, moral values, public order or rights of personality shall be null and void. Therefore, if the circumstances that cause punitive damages fall under the scope of Article 1404, such punitive damages will not be insurable under Turkish law.
What regime governs (re)insurers’ subrogation rights?
The insurer shall legally succeed the insured on payment of the insurance indemnity. If the insured has the right to file suit against third parties for the loss that it sustained, this right shall pass on to the insurer up to the amount it has paid as per Article 1472 (regarding property insurance) and Article 1481 (regarding liability insurance) of the Commercial Code.
Subrogation rights arise directly from the law. There is no need to conclude any agreement between the parties in order for the insurer to be entitled to subrogation. It is not possible under the law to renounce subrogation rights.
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