News Middle East09 Dec 2020

Turkey:Regulator continues to cap price increases in motor third party insurance business

| 09 Dec 2020

The Insurance and Private Pension Regulation and Supervision Authority (SEDDK) has extended the application of a ceiling on premiums for compulsory motor third party liability insurance for another year starting on 1 January 2021.

The goal is to keep the premiums at reasonable levels for the insured.

The ceiling has been applied to premiums for high-risk drivers, including drivers of cabs, minibuses, commercial buses and trucks since 12 April 2017, following vehicle owners' complaints over steep premium hikes in 2015 and 2016.

The SEDDK also determined the premium increase rate in traffic insurance for next year. Starting in January 2021, premiums will be increased by 1% every month.

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Mr Aydin Agaoglu, honorary president of the Consumer Rights Association, pointed out that people avoided taking public transport due to the COVID-19 pandemic. He said, “People also lost income during this period. In this process, any increase in the premiums for motor compulsory liability insurance that people had to purchase for their modest vehicle would have been a blow.

“Also, commercial taxis attract a very high insurance premium, because they are constantly in traffic, and the risk of accidents is quite high. However, commercial taxi operators pass on the cost to the consumer.

“The continuation of the ceiling price is a very appropriate decision. Similar applications should be made in other sectors as well. At this point, everybody will sacrifice a little bit. Maybe some sectors will not profit and some may even make a loss.”

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