Urgent measures are needed in the compulsory motor third-party liability insurance branch (dubbed 'traffic insurance'), says AcnTURK Insurance general manager, Mr Ali Murat Disci.
In an article titled “Traffic Insurance is not just Traffic Insurance”, published by Insurance Media, Mr Disci says that the traffic insurance coverage rate has fallen to 70% among 31m registered vehicles in Turkiye.
He says that although traffic insurance is mandatory, the coverage rate in Turkiye never exceeded 85% in the past. Now, it has fallen below 80%, and hitting 70% which indicates that the motor insurance business has gone back more than 10 years in terms of penetration.
The number of vehicles covered by traffic insurance in Turkiye exceeded 23.34m as of 31 March 2024, according to data from the Insurance Association of Turkiye (TSB). This number constituted 79.5% of the total number of vehicles registered in the country which reached 29.37m.
Mr Disci says that the fall in the coverage rate is worrying. He names rising premiums as one of the main reasons for the decline, as premiums become unaffordable.
Proposed solutions
Mr Disci also states that the coverage limits in traffic insurance are insufficient in today's conditions, and the insured has to make out-of-pocket payments for vehicles that are involved in accidents.
He offers several recommendations to resolve some issues in the traffic branch. These recommendations include:
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Direct compensation system — Speeding up the system by making it mandatory.
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Loss of value solutions — Developing practical solutions by removing the issue from the dispute, if any.
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Use of equivalent parts — Implementing certification processes.