Vehicle owners are not obtaining mandatory insurance

The Insurance Association of Türkiye (TSB), according to data compiled from its records, reports that the number of mandatory traffic insurance policies, which cover damages to the other party in potential accidents on highways, reached 23 million 344 thousand 19. This figure accounts for 79.5 percent of the 29 million 367 thousand 254 vehicles registered in traffic in Türkiye.

CARS LEAD THE WAY

For voluntary comprehensive insurance (kasko), which provides insurance protection for drivers' own vehicles, the number of policies at the end of March was 7 million 393 thousand 420, with an insurance rate of 25.18 percent.

It was determined that 6 million 23 thousand 235 of the vehicles registered in traffic do not have mandatory traffic insurance.

As of the end of March, the highest insurance rate was observed in cars at 94.29 percent. Out of 15 million 498 thousand 386 registered cars, 14 million 612 thousand 765 have mandatory traffic insurance. The car category was followed by light trucks at 89.79 percent, special-purpose vehicles at 80.94 percent, and minibuses at 80.55 percent.

The lowest insurance rate was recorded for motorcycles at 35.83 percent. While there are 5 million 323 thousand 177 registered motorcycles, the number of insured motorcycles was 1 million 907 thousand 158.

WHICH VEHICLE LEADS IN COMPREHENSIVE INSURANCE?

In comprehensive insurance (kasko), the highest rate was seen in the truck group at 48.28 percent. The number of policies in this group was 469 thousand 357. Cars ranked second with 35.04 percent, and buses ranked third with 26.64 percent.

Only 0.42 percent of motorcycles were covered by comprehensive insurance.

The rate of obtaining comprehensive insurance for registered vehicles decreased from 27.32 percent to 25.18 percent compared to the same period last year.

INCREASE OBSERVED IN DAMAGE PAYMENTS

In recent years, the rise in spare parts prices, the high volatility in vehicle values—which directly affects minimum wage and depreciation costs impacting bodily injury and labor fees—have significantly affected the traffic insurance damage costs of insurance companies.

The production of more technological vehicles has led to an increase in payments per file due to rising repair costs. The damage payments made by insurance companies increased by 112 percent compared to the first quarter of 2023, rising to 24.8 billion liras.

Considering the changing economic conditions, the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) has implemented a damage cost index to protect the interests of the insured and ensure sustainability in the damage-premium balance.

COST INCREASES ARE HIGH

This index, which serves as a reference point in determining mandatory traffic insurance premiums, is calculated monthly by taking into account price changes in minimum wage, spare parts, maintenance-repair, and motor vehicles.

Emphasizing a free tariff system because policy premiums cannot cover cost increases despite the new application, the TSB is focusing on different short- and medium-term solution proposals to place the cost of the coverage provided by insurance companies into a predictable and sustainable framework.

CALL FROM TSB!

The TSB states that with the transition to a free tariff in traffic insurance, a fair pricing system will emerge where insured parties with low damage rates will pay less, and those with high damage rates will pay more.

The Association is working on many topics, such as controlling costs by increasing the use of equivalent parts in traffic insurance, improving service quality through direct compensation, and differentiating premium prices with person-based policies that evaluate driver behavior and clarify the distinction between good and bad drivers.