Bad news for earthquake survivors: Court of Cassation ruling on DASK

According to the ruling, DASK will pay for damages based on the amount stated in the policy.

Following the decision, DASK will resume the damage payments it had previously suspended. 

According to a report by Hürriyet columnist Noyan Doğan; at the end of 2022, DASK increased the coverage limits for compulsory earthquake insurance, raising the maximum coverage amount for a residence from 320 thousand liras to 640 thousand liras. These increases were published as a communiqué, and at that time, citizens were notified to 'renew your policies by paying an additional premium to benefit from the new coverage limits and obtain your endorsement.' Some had the endorsements done and renewed their policies, but a vast majority did not, choosing to continue with the old coverage limits. The February 6 earthquakes occurred, and as mandated by law, DASK paid the damages of those who had obtained endorsements based on the new coverage limits, while paying the damages of those who had not based on the coverage limits written in their policies. In the Kahramanmaraş earthquake, DASK paid 36 million TL to 600 thousand citizens whose homes were damaged.

WHAT HAD HAPPENED?

At this point, some individuals looking to profit from the situation appeared, knocking on the doors of earthquake survivors in the region one by one, confusing citizens by saying, 'DASK is obligated to pay damages based on the new coverage limits even if an endorsement was not obtained; file a lawsuit, go to arbitration, you will definitely win.' The Ombudsman Institution also issued a recommendation decision for DASK to pay the insurance compensation to those who had compulsory earthquake insurance and whose homes were damaged in the Kahramanmaraş earthquake according to the 2023 tariff instead of the 2022 tariff. Hoping to receive more compensation, citizens applied either to the courts or the Insurance Arbitration Commission. There is no problem up to this point; citizens sought their rights through legal channels. However, interestingly, two different decisions emerged after the applications. In one, the ruling was in favor of DASK, stating, 'DASK acted in accordance with the rules by paying the coverage limits written in their policies to those who did not obtain an endorsement.' In the other, the exact opposite occurred, with a ruling against DASK and in favor of the consumer, stating, 'DASK is obligated to make payments based on the new coverage limits even without an endorsement.'

DASK SUSPENDED PAYMENTS

Due to the conflicting decisions, in order to prevent discrimination among citizens, DASK suspended all damage payments in the earthquake region and applied to the Court of Cassation, stating, 'We will pay whatever the Court of Cassation decides; if it says pay the old-coverage policies based on the new coverage limits, we will pay that too.' The Court of Cassation has announced its expected decision. In summary, it ruled that DASK's liability is limited to the coverage written in the policy and that payments cannot be made based on new coverage limits without collecting additional premiums, and it also overturned the decision made by the Insurance Arbitration Commission's Appeal Board.

WHAT WILL HAPPEN NOW?

So, what will happen now? DASK will pay the damages of earthquake survivors in the earthquake region who did not obtain an endorsement and whose homes were destroyed in the earthquake based on whatever the coverage limit in their policies is—which is 320 thousand liras, the highest coverage amount for a residence.

I would like to make a brief comment at this stage. This issue has been debated for months, and I have touched upon it from time to time in my columns. Some even judge me for being anti-consumer. But that is not the case. The decision rendered by the Court of Cassation eliminated the injustice between the consumer who acted consciously and responsibly at the time by obtaining an endorsement and the one who did not. Secondly, it told those who expected DASK to make payments outside of the law and general conditions, 'this is what the law is.' Otherwise, this would not be an insurance system, but state aid.

Secondly, and more importantly; if the Court of Cassation had made the opposite decision, DASK would have had to make payments far exceeding the damages it had already paid. And it is not DASK that pays this money, but international reinsurance companies. If these companies had paid money that was not in accordance with insurance conditions following a court decision—which they would have—they would never have provided coverage to the Turkish insurance market again. In that case, citizens would not have been able to get DASK, nor could large industries have insured their facilities.