Scope of Turkish insurance market

Scope of Turkish insurance market

Created: 2024-06-10 Modified: 2024-07-10 Views: 445 Luxury Signature Admin
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The Turkish insurance market enjoys very high flexibility, due to the long history of insurance in Turkey and the multiplicity of insurance and reinsurance companies in Turkey, where there are also many international companies in addition to the presence of companies operating in the solidarity insurance system, which takes into account the provisions of Islamic roles and is called in Turkey participatory insurance. In addition, one of the factors that contributed to strengthening the position of insurance in Turkey is the presence of a large number of insurance subscribers, whether through compulsory or optional insurance. As is known, insurance lives on the law of large numbers. Given Turkey’s population, in addition to hosting large numbers of expatriate individuals and companies, it requires obtaining insurance protection for their activity and presence in Turkey. We can say that these large numbers of insurance policy holders were among the reasons that strengthened flexibility in pricing and technical operations, in addition to easy processing of claims. It is worth noting that insurance companies in the Turkish market benefit from and exploit the latest and most up-to-date technologies for automating insurance operations. Recently, artificial intelligence, which has begun to be used in analyzing data and following up on claims, contributes significantly to the progress and development of this sector.

 

In Turkey, as in other countries, insurance is divided in terms of the mechanism for obtaining it into mandatory and optional insurances for individuals, property and liabilities, which we review as follows:

 

Mandatory insurance

Individuals:

Government health insurance through the Social Security Institution SGK

Health insurance through the Turkish Social Security Institution for everyone who works legally and officially in Turkey, whether a citizen or an expatriate. This government insurance covers full medical expenses in government hospitals, with relative coverage from private sector medical service providers such as hospitals, clinics, radiology centers, analysis laboratories, and pharmacies. In addition to covering injuries resulting from work, such as disability and death compensation, god forbid, up to a retirement salary.

 

Health insurance for foreigners YABANCI SAĞLIK SİGORTASI

It is health insurance imposed on those applying for residency in Turkey for ages between 18 and 65 years. Prices for the lowest age group start from approximately 1.900 Turkish liras, reaching 6.700 for the highest age group (prices prevail as of the date of writing the article and are subject to change). The coverage of this insurance is based on what the Turkish government specified as follows: Medical care up to 5.000 Turkish liras after a waiting period of 6 months, with a coverage rate of 80%, a deductible rate of 20%, hospitalization with an open financial ceiling after a waiting period of 9 months, within a network of private hospitals determined by the insurance company.

 

Travel insurance Seyahat sigortası

As is known, when a visa is imposed on citizens of any country in order to enter its country, it is required to provide travel insurance as a basic condition for obtaining a visa, the most important of which is the Schengen countries, for example, as this insurance covers the ceiling for emergency treatment compensation up to 30.000 euros, in addition to other coverages such as delayed arrival of luggage, for example. Turkey also imposes this type on applicants for a visa to Turkey for some nationalities. The cost of travel insurance depends on the length of stay and is very reasonable, starting from 5 euros.

 

Properties:

Earthquake insurance, known as DEPREM SİGORTASI DASK

After the famous Marmara earthquake that struck Turkey in 1999, the Disaster Insurance Corporation was created, known as DASK, and a fund was established to compensate for damages resulting from earthquakes. Indeed, home insurance became compulsory in Turkey against earthquakes, with small premiums determined according to the building site, area, type and age of construction, and the number of floors. For the sake of clarification, we can mention that the cost of insurance per square meter in Istanbul, on average and estimated, is about 14 Turkish liras. This type of insurance compensates for crack damage and building damage, whether partial or total, and the property owner or tenant is obligated to obtain this type of insurance when subscribing to an electricity, water or gas service. The effectiveness of this type of insurance was proven when the earthquake occurred on February 6, 2023, which struck several regions such as Hatay, Maraş and Gaziantep, and compensated for the damages of all those who lost their homes. Some neighboring countries even studied the Turkish experience in this field to adopt it in their countries.

 

Liability insurance

Civil liability insurance against third parties for vehicles, which is known as Trafik Sigortası

At the forefront of this type of insurance is compulsory third-party vehicle insurance, also known as (Traffic). Turkey, like other countries, guarantees the safety of all road users, whether it is a vehicle with a local license plate or even a foreign license plate coming to Turkey. Compulsory vehicle insurance pricing in Turkey is subject to insurance fairness, as there is no single tariff for each category of car. Vehicle insurance pricing in Turkey depends on the vehicle itself and the owner, as looking at the vehicle, the technical specifications of the vehicle are looked at and not its value, such as the size and classification of the vehicle, the type of fuel, the number of passengers, the state to which the vehicle belongs, the record of losses on the vehicle itself, known in Turkey as Hasar Kaydı. Considering the owner, for example, whether it is owned by a company or an individual, a record of losses or a clean record of losses, the age of the driver, etc. All of this data is processed through a central system whose data is shared by all insurance companies, and accordingly, the insurance company’s share is added based on commercial factors, competition factors, and the pricing policy whose policy is determined by the Turkish government in coordination with Turkish insurance companies. The compensation ceiling for this insurance for the year 2024 is the following:

Material damages to the opposing party (whether it is another vehicle, public property, or private property): 200.000 Turkish liras per accident, 400.000 Turkish liras during the year.

Physical damages: in one accident 1.800.000 Turkish liras, the total per year is 13.050.000 Turkish liras.

 

It is also possible to benefit from compensation from the counterparty for the decrease in the value of the vehicle after its repair and the loss of part of its market value due to the repair that was carried out to it.

 

Professional liability insurance

This type requires some activities to cover liability resulting from professional practice error, for example civil liability insurance for doctors’ professional practice errors.

 

Optional insurances

Individuals:

Supplementary health insurance TAMAMLAYICI SAĞLIK SİGORTASI

This insurance targets those registered with the Social Security Institution (SGK), as it works to cover the remaining part of the cost of treatment in private sector hospitals that is not covered by the Social Security Institution, whether for medical care or hospitalization. The treatment ceiling is often financially open, taking into account a 6-month waiting period for operations, and outpatient visits are limited to 10 visits per year. Insurance premiums are very reasonable, about 10.000 Turkish lira per year. Of course, pricing depends on the age of the insured in the first place and the level of the hospitals in the second degree.

 

Private health insurance or what is known as comprehensive health insurance ÖZEL SAĞLIK SİGORTASI

There is high competition between insurance companies in providing this product, as it is the insurance under which the insured obtains the highest levels of medical services. This insurance can be obtained by anyone under the age of 60 years. For the first enrollment in this program, a national number is required, whether for Turks or expatriates. There are many insurance programs and plans available by companies operating in the market, and the coverage is summarized as follows:

Medical coverage with no upper limit on visits.

Hospitalization coverage with an open financial limit.

A private hospital network including almost all hospitals in Turkey.

The possibility of expanding geographical coverage to include all parts of the world.

And many medical advantages.

It should be noted that this type of insurance does not cover pre-contractual illnesses, and there is a one-year wait for non-emergency cold surgeries. The premiums for this type of insurance are relatively high, and some tend to subscribing only to the hospitalization program and excluding medical care, which reduces the cost by half.

 

Properties

Comprehensive home insurance KONUT SİGORTASI

One of the most important types is comprehensive insurance for the home and its contents (building, furnishings, electrical appliances, decorations), which is available at a very reasonable cost that depends on the value of the home’s contents, area, and location. The insurance covers the following: fire, theft, natural damage, broken glass, plane crashes, or parts. Airplanes, riots, terrorism, and many additional benefits, for example neighborhood damage, and covering the cost of renting another house until the house is rehabilitated.

 

Comprehensive workplace insurance

This insurance can be obtained for stores, factories, companies, restaurants, etc.

It covers all the coverages available within comprehensive home insurance, in addition to the following: covering expenses resulting from work cessation, and liability towards visitors.

 

KASKO comprehensive vehicle insurance

This insurance covers material damage that may befall the vehicle as a result of an accident, whether partial damage or total loss. It also covers theft, fire, natural disasters and riots, in addition to side benefits such as: expanding geographical coverage to include accidents that may befall the vehicle while it is outside Turkey, assistance service on roads, such as towing the vehicle to a repair center, providing an alternative vehicle for the insured to use until the vehicle repair is completed, which is often limited to 14 days, increasing the ceiling for third-party damage compensation in the case that the compulsory third-party insurance damages compensation is insufficient for an open roof, and repairing the vehicle within the agency.

 

Hull and marine vehicle insurance TEKNE SİGORTASI, HULL, P&I

This type of insurance specializes in insuring the hulls of ships against all types of risks, including yachts, in addition to shipowner’s liability insurance. The insurance is carried out in accordance with the conditions issued by the Insurance Underwriters Association in London and approved by the Turkish Federation of Insurance Companies.

 

Insurance of goods during transportation (shipment insurance) NAKLİYAT SİGORTASI

Turkey's geographical location as a connecting point between East and West and the abundance of waterways have enhanced Turkey's role in the field of logistics and shipping, which has led to Turkey obtaining an important position globally within the shipping insurance sector. Shipping insurance includes material damages that may result from accidents when goods are transported from one place to another by one of the means of transport (ships, trucks, planes or trains). Estimatedly, the average freight insurance rate is approximately 2 per thousand, 0.02%.

Coverage can also be expanded to include military operations with an additional insurance premium.

 

Optional liability insurance İHTİYARİ MALİ MESULİYET

Due to the limited ceiling for compulsory vehicle insurance compensation in Turkey, an excellent insurance product was created to increase the protection ceiling called Optional Civil Liability Insurance, known as İMM. It can be purchased in addition to traffic insurance, according to which the limits of compensation to third parties become open, and its annual cost is very reasonable.

 

For more information about insurance in Turket and to obtain guaranteed insurance services, contact us: Insurance services

Frequently asked questions

What is SGK State Health Insurance in Turkey?

Health insurance through the Turkish Social Security Institution for everyone who works legally and officially in Turkey, whether a citizen or an expatriate. This government insurance covers full medical expenses in government hospitals, with relative coverage from private sector medical service providers such as hospitals, clinics, radiology centers, analysis laboratories, and pharmacies. In addition to covering injuries resulting from work, such as disability and death compensation, god forbid, up to a retirement salary.

What is health insurance for foreigners in Turkey?

It is health insurance imposed on those applying for residency in Turkey for ages between 18 and 65 years. Prices for the lowest age group start from approximately 1.900 Turkish liras, reaching 6.700 for the highest age group (prices prevail as of the date of writing the article and are subject to change). The coverage of this insurance is based on what the Turkish government specified as follows: Medical care up to 5.000 Turkish liras after a waiting period of 6 months, with a coverage rate of 80%, a deductible rate of 20%, hospitalization with an open financial ceiling after a waiting period of 9 months, within a network of private hospitals determined by the insurance company.

What is travel insurance in Turkey?

As is known, when a visa is imposed on citizens of any country in order to enter its country, it is required to provide travel insurance as a basic condition for obtaining a visa, the most important of which is the Schengen countries, for example, as this insurance covers the ceiling for emergency treatment compensation up to 30.000 euros, in addition to other coverages such as delayed arrival of luggage, for example. Turkey also imposes this type on applicants for a visa to Turkey for some nationalities. The cost of travel insurance depends on the length of stay and is very reasonable, starting from 5 euros.

Is it necessary to translate documents into Turkish?

Yes, all official certified documents must be translated into Turkish by certified translators and notarized by a notary public.

What ownership rights are associated with property in Turkey?

Ownership rights in Turkey include the right to use, rent, sell, or bequeath the property. Property owners also have the right to request maintenance and essential services from the residential complex or municipalities.

What legal protections are available for foreign buyers in Turkey?

Turkish law guarantees the rights of foreign buyers just like any Turkish citizen. It is advisable to ensure all legal procedures are followed and to work with a qualified lawyer to secure your rights.

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