What Is Diminished Vehicle Value?

Traffic accidents do not only cause physical damage; they can also reduce a vehicle’s second-hand market value. This reduction is known as diminished value (araç değer kaybı). Even where the repair is technically flawless, the vehicle’s damage record, its replaced or repaired parts and the nature of the damage may affect how prospective buyers assess it.

Article 85 of the Highway Traffic Act No. 2918 (Karayolları Trafik Kanunu) governs the civil liability of the vehicle’s operator and, where the conditions are met, of the owner of the affiliated enterprise for damage arising from the operation of a motor vehicle. A diminished value claim is determined by assessing the degree of fault, the causal link between the damage and the accident, and the other conditions of liability together.

What Has Changed for Diminished Value Since 1 July 2026?

An amendment prepared by the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) and published in the Official Gazette (Resmî Gazete) No. 33278 of 12 June 2026 introduced provisions in the General Conditions of Compulsory Motor Vehicle Financial Liability Insurance (Karayolları Motorlu Araçlar Zorunlu Mali Sorumluluk Sigortası Genel Şartları) that directly concern diminished value. The changes entered into force on 1 July 2026. The main changes are as follows:

  • No separate application is required: A claimant who applies to the compulsory traffic insurer for vehicle damage is deemed to have also claimed diminished value. A separate petition for diminished value is not necessary.
  • Diminished value is determined in the loss adjuster’s report: Where an insurance loss adjuster has been appointed for the vehicle damage, the adjuster must also include the assessment of the diminished value amount in the report.
  • The calculation criteria are expressly listed: The vehicle’s make, age, model, degree of wear, damaged parts, previous damage history, and the difference between its pre-accident second-hand sale value and its post-repair second-hand sale value are taken into account.
  • Short notification period: The insurer must notify the claimant of the diminished value amount it has calculated, in writing or via a durable medium such as text message, e-mail or e-Devlet, no later than the business day following the date on which it receives the final loss adjuster’s report.
  • Priority for original parts: As a rule, an original part that cannot be repaired must be replaced with an original part. Where an equivalent or reusable part is used, the burden of proving that the claimant’s consent was obtained or that replacement with an original part was not possible lies with the insurer.
  • Vehicles with heavy damage: For vehicles found by the loss adjuster’s report to be heavily damaged, no compensation is paid until the registration certificate stamped “withdrawn from traffic” (trafikten çekilmiştir) is submitted to the insurer.

Although this amendment simplifies the application process, the amount calculated by the insurer is not binding on the claimant. If you consider that the amount notified does not cover your actual loss, you may apply to the Insurance Arbitration Commission (Sigorta Tahkim Komisyonu) or bring a lawsuit. Which rules apply in a specific case must be assessed separately according to the dates of the accident and the application.

How Is Diminished Value Calculated?

Diminished value is not calculated simply by looking at the repair invoice. The General Conditions expressly provide that diminished value is to be determined by an insurance loss adjuster appointed in accordance with the procedures and principles set by SEDDK, based on the difference between the vehicle’s pre-accident and post-repair second-hand sale values.

In the examination carried out by the insurance loss adjuster or, where the dispute goes to court, by a court-appointed expert, the following factors are important:

  • The make, model and year of manufacture of the vehicle
  • Its mileage and degree of wear on the date of the accident
  • Its second-hand market value before the accident
  • The nature and extent of the damage and the areas affected
  • Parts that were repaired, repainted or replaced, and whether the parts used were original or equivalent
  • The vehicle’s previous damage and repair history
  • The degree of fault and how the accident occurred

Who Is Liable for Diminished Value Compensation?

As a rule, a vehicle owner who is wholly or partly without fault in the accident may claim diminished value in proportion to the other party’s degree of fault. Depending on the circumstances, the claim may be brought against the compulsory traffic insurer of the vehicle at fault, its operator, the driver or other liable parties.

Article 91 of the Highway Traffic Act requires compulsory financial liability insurance to be taken out to cover the liability set out in the first paragraph of Article 85. Under the General Conditions, the property damage cover also extends to the diminished value of the damaged vehicle. The degree of fault directly affects the amount that can be claimed.

Compulsory Traffic Insurance Coverage Limits for 2026

Compulsory traffic insurance coverage limits are updated every year, and the limits in force on the date of the accident apply. For the period from 1 January to 31 December 2026, the property damage limit is TRY 400,000 per vehicle and TRY 800,000 per accident.

The limit for medical expenses and for disability and death is TRY 3,600,000 per person. The per-accident bodily injury limit varies according to the vehicle’s use and vehicle class; for example, it is TRY 18,000,000 for motor vehicles used to carry passengers. The current policy, the vehicle class and the date of the accident should be checked together.

Diminished value is covered under the property damage cover together with the vehicle damage. The possibility of pursuing other liable parties for any part of the loss that exceeds the policy limit or falls outside the insurance cover may be examined separately.

Documents Required for a Diminished Value Claim

Although no separate petition is required for diminished value, complete and consistent documents make it easier to determine the damage and the diminished value accurately.

  • The agreed accident report (kaza tespit tutanağı) or the accident documents drawn up by law enforcement
  • Records showing the degree of fault and, where applicable, the outcome of any objection to the fault assessment
  • The vehicle registration certificate and the claimant’s identity and contact details
  • The loss adjuster’s report, service records, repair invoices and the list of replaced parts
  • Photographs of the accident and of the damage to the vehicle taken from different angles
  • The insurance policy and claim file details
  • Records supporting the vehicle’s market value on the date of the accident
  • Details of the bank account to which payment is to be made

Applying to the Insurance Company

Since 1 July 2026, an application to the compulsory traffic insurer for vehicle damage also covers the diminished value claim. Nevertheless, it is advisable to apply in writing or through a channel that creates a record, and to keep the application reference number. A record should also be kept of any notification made through the Alo 193 Joint Claims Notification Centre (Alo 193 Ortak Hasar İhbar Merkezi), established by SEDDK circulars and operational since 1 September 2026; this record is important in proving the date from which time limits begin to run.

Ask the insurer in writing for the diminished value amount it has notified and the loss adjuster’s report on which it is based. Read the scope of any release (ibraname) or payment document carefully before signing it; if you consider that the payment does not cover your loss, state in writing that you reserve your rights to claim any excess amount.

Under Article 97 of the Highway Traffic Act, if the insurer fails to respond in writing within 15 days of the application, or if its response does not satisfy the claim, the injured party may consider bringing a lawsuit or applying for insurance arbitration.

Applying to the Insurance Arbitration Commission

If the insurance company rejects the claim, pays only part of it or, in the case of traffic insurance, fails to respond within the 15-day period, an application to the Insurance Arbitration Commission (Sigorta Tahkim Komisyonu) may be considered. Before applying, a written application must have been made to the insurance company and that application must be documented.

Once a file has been referred to an arbitrator following a preliminary review, the arbitrator or arbitral panel will, as a rule, render an award within four months at the latest; this period may be extended with the express written consent of the parties.

As of 22 January 2026, arbitral awards in disputes of TRY 35,000 or more may be challenged by objection before the Commission. In disputes exceeding TRY 383,000, the decision of the objection panel may be appealed on points of law (temyiz). As these monetary thresholds are updated periodically, the amounts in force on the dates of the application and the decision should be checked.

Litigation and Mediation

Where a lawsuit against the insurance company or other liable parties is contemplated, the court with subject-matter and territorial jurisdiction is determined by the capacity of the parties and the legal nature of the dispute. The assessment of the competent court and the applicable procedure is not the same in every diminished value case.

In commercial or consumer disputes involving claims for payment or compensation, applying to mediation may be a mandatory precondition to filing a lawsuit. By contrast, mandatory mediation is not required for applications made directly to the Insurance Arbitration Commission. The duration of mediation and the applicable procedure vary depending on the type of dispute.

It is not possible to determine the duration of court or arbitration proceedings with certainty in advance. The scope of the file, the expert examination, the evidence and the available means of challenge all affect the overall duration.

Key Points to Avoid Losing Your Rights

  • Unless there is a compelling reason such as personal safety or taking an injured person to a healthcare facility, do not leave the scene of the accident, and make sure that an accident report is drawn up; otherwise, the insurer may have a right of recourse against the insured.
  • Photograph the damage from different angles before having the vehicle repaired.
  • Keep service documents, invoices and the list of replaced parts; check on the invoice whether the parts fitted are original or equivalent.
  • Keep records showing the degree of fault and, where applicable, the outcome of any objection.
  • Ask the insurer in writing for the diminished value amount it has notified and the loss adjuster’s report; do not accept an offer without reviewing the basis of the calculation.
  • Under Article 109 of the Highway Traffic Act, compensation claims become time-barred 2 years from the date on which the damage and the person liable for compensation became known, and in any event 10 years from the date of the accident; if the incident constitutes a criminal offence for which a longer limitation period is prescribed, that period applies. Obtain a legal assessment without delay.

Conclusion

Diminished value is a head of damage that may arise after a traffic accident and can be claimed where the legal conditions are met. Since 1 July 2026, the process has become simpler because a vehicle damage application also covers the diminished value claim; however, to ensure that the amount is calculated correctly, the degree of fault, the nature of the damage, the vehicle’s pre-accident condition, the insurance cover and the documents in the file must be examined together.

If you have been involved in an accident and believe that your vehicle’s market value has decreased, it is important to keep all your documents and to act before any deadlines expire. If you are considering challenging the amount notified by the insurer, you can obtain legal support from an attorney for an assessment of your specific situation.