This is the English version of a Turkish article. The original, with further detail and linked petition templates, is at Sigorta Tazminatı Reddedilirse Ne Yapılır?.
Where an insurer refuses the indemnity or underpays it, there are three routes: the Insurance Arbitration Commission, the insurance ombudsman, and proceedings. All three share one precondition — a written application to the insurer first. Limitation is as a rule two years from when the claim falls due, with a longer outer limit running from the event.
People who buy a policy expect the insurer to pay when a loss occurs. In practice insurers refuse claims on various grounds, or pay less than is due. The insured then has more than one route open, and understanding them before suing saves both time and money.
When Must the Insurer Pay?
The insurance contract is governed by Article 1401 and following of the Commercial Code. The insurer must pay the indemnity, up to the policy limit, when the risk provided for materialises. That obligation comes before the insurer's commercial concerns: an insurance contract rests on a relationship of trust.
The insurer must examine the claim and decide within a reasonable time of learning of it. Drawing that out unnecessarily, or refusing without justification, gives the insured a right to sue.
“An insurer who does not pay the insurance indemnity or sum when due is liable for default interest.” — Commercial Code, Article 1427
The Usual Grounds of Refusal
- The risk is excluded: the insurer says the loss falls outside the policy.
- Fault or negligence: that the insured caused the loss intentionally or by gross negligence.
- Breach of the duty of disclosure: that material information was concealed or misstated when the contract was made.
- Loss outside the policy period.
- Missing documents: the process drawn out on the ground that what was asked for is incomplete.
The Arbitration Commission
The Insurance Arbitration Commission, established under the Insurance Act (no. 5684), resolves disputes with insurers through independent arbitrators. It is an alternative to proceedings, not a compulsory stage — what is compulsory is the written application to the insurer.
To apply, a solution must first have been sought in correspondence with the insurer, and the insurer must have answered unfavourably or not at all. The fees are low, and arbitrators' decisions below the amount set in the legislation are final.
- The application can be made electronically through the Commission's website.
- The arbitrator's decision is enforceable like a judgment.
- Arbitration usually concludes far more quickly than proceedings.
| Arbitration Commission | Proceedings | |
|---|---|---|
| Precondition | Written application and an unfavourable answer | Written application to the insurer |
| Insurer's membership | Required | Not required |
| Time | Relatively short | Depends on the court's timetable |
| Cost | A fee scaled to the amount | Court fees and expenses |
| The decision | Final below the statutory amount | Subject to appeal |
| Court | — | The commercial court of first instance |
Ambiguous terms in an insurance contract are construed against the party that drafted them — in the insured's favour.
The Insurance Ombudsman
The ombudsman mechanism within the Arbitration Commission is an alternative route, particularly for smaller disputes. The ombudsman tries to bring the parties to agreement; if none is reached, the matter moves to arbitration for a binding decision.
Where to Sue
For disputes above the statutory amount, or where proceedings are the better course, the commercial court of first instance has jurisdiction. Proceedings may be brought where the insurer has its head office, or where the loss occurred.
What can be claimed:
- the indemnity refused or underpaid
- interest running from the date of default
- pecuniary and non-pecuniary damages, where applicable
- the costs of the proceedings and the lawyer's fee
Ambiguity Is Construed in the Insured's Favour
Vague or ambiguous terms in a policy are construed in the insured's favour, under Article 1401 of the Commercial Code and the general rules of construction in the Code of Obligations. The principle prevents ambiguity in a standard form drafted by the insurer being used against the consumer.
Limitation
Under Article 1420 of the Commercial Code, all claims arising from an insurance contract are barred two years after the claim falls due, and in any event six years after the event occurred. In liability insurance the period can run differently.
Missing it means losing the right to the indemnity, so keep the period in view even while negotiations with the insurer continue — correspondence alone does not stop time running.
A written refusal is the evidence everything else rests on. And limitation runs from when the claim falls due, with an outer limit from the event — negotiating with the insurer does not stop it.
Frequently Asked Questions
What must I do first?
Apply to the insurer in writing and obtain its reasons for refusal in writing. That application is the precondition of every other route.
Is arbitration compulsory before suing?
No. The Arbitration Commission is an alternative, not a compulsory stage. What is compulsory is the written application to the insurer.
Which is faster?
Arbitration, in most cases — and its decisions below the statutory amount are final and enforceable like a judgment.
What can I claim in proceedings?
The indemnity refused or underpaid, default interest from the date of default, damages where applicable, and the costs and lawyer's fee.
How long do I have?
Two years from when the claim falls due, and six years from the event in any event. Negotiating with the insurer does not stop time running.