This is the English version of a Turkish article. The original, with further detail and linked petition templates, is at Araç Değer Kaybı Davası: Kimden, Ne Kadar İstenir?.
Diminution in value is the fall in your vehicle's second-hand price after an accident you were not at fault for, even once it has been repaired, and it is claimed from the other party's compulsory motor insurance. A written application to the insurer is a mandatory first step; if the company does not respond within 15 working days, or its offer is inadequate, the matter goes to the Insurance Arbitration Commission or the commercial court.
Your car was damaged, the insurer had it repaired, and it looks fine. Then you come to sell it, the buyer sees the damage record and drops the price. That gap is the diminution in value, and it is claimed separately from the cost of repair.
What It Is
Diminution in value is the difference between the vehicle's second-hand market value before the accident and its value after repair. It arises even where the repair is perfect, because the damage record is permanently attached to the vehicle.
Its legal basis is liability in tort: the person who caused the loss must make good the whole of it. The cost of repair is one element of the loss; diminution in value is another.
The figure varies with the vehicle's age, mileage, the severity of the damage and which parts were replaced. Damage to the chassis or structural parts increases it markedly, and the proportion is higher on newer, low-mileage vehicles.
Who It Is Claimed From
The other party's compulsory motor insurance. Diminution in value falls within the cover of compulsory third-party liability insurance, and the claim is made to the insurer first.
The driver and keeper at fault. Where the cover is insufficient or the claim is refused, the loss may be claimed directly from the party at fault. The keeper and the driver are liable together.
Your own comprehensive policy does not, as a rule, cover diminution in value; it covers the repair. Check your policy for any specific cover.
How Fault Affects the Amount
Diminution in value is paid in proportion to the other party's fault. If they are wholly at fault, the whole loss; if fault is shared, their share of it.
Where the accident was entirely your own fault, no claim arises.
Fault is established by the accident report and, where needed, expert examination. The assessment in the report is not conclusive; it can be challenged and re-examined in court.
The Order of Application
1. Written application to the insurer. To the other party's motor insurer, with the documents. The statutory period for the insurer's response then runs.
2. Insurance Arbitration Commission or court. If the claim is refused, underpaid or not answered in time, two routes open: an application to the Commission, or an action. Arbitration is usually faster, but the insurer must be a member of the Commission.
If you sue the driver at fault directly the route differs: where the dispute is commercial, mediation may be a condition of the action. Establish at the outset which precondition applies to your chosen defendant.
Documents required: the accident report, the registration document, the licence, repair invoices or a loss adjuster's report, documents showing the vehicle's pre-accident condition, and a printout of the damage record.
| Stage | Where | Period | Note |
|---|---|---|---|
| 1. Written application | The at-fault vehicle's motor insurer | Response within 15 working days | Mandatory before arbitration or an action |
| 2. Arbitration | Insurance Arbitration Commission | Fee varies with the amount | The insurer must be a member |
| 3. Action | Commercial court | 2 years from the accident | Where the act is also an offence, the criminal period applies |
Compensation is paid in proportion to fault: if you were 25 per cent at fault, you recover 75 per cent of the diminution.
The Limitation Period
Claims in tort are time-barred two years after the loss and the person responsible become known, and in any event ten years after the act.
Where the accident also constitutes an offence — if there were injuries — the longer criminal limitation period may apply. That does not arise in purely property-damage accidents.
Claims against the insurer are subject to the limitation periods arising from the insurance contract. Because the applicable period depends on the defendant, applying early is the safest course.
That the insurer paid for the repair does not remove your claim for diminution in value; they are separate heads. But signing a release does change the position — read any document containing the words "I waive all claims" before signing it.
Frequently Asked Questions
Who do I claim from?
First the other party's compulsory motor insurance; if the cover is insufficient or the claim refused, the driver and keeper at fault. Your own comprehensive policy does not usually cover it.
Can I claim if I was partly at fault?
Yes, in proportion to the other party's fault. If the accident was entirely your fault, no claim arises.
The insurer refused. What now?
Apply to the Insurance Arbitration Commission or bring an action. Arbitration is usually faster, but the insurer must be a member.
How is the amount calculated?
By comparing the second-hand value before the accident and after repair. Age, mileage, severity and replaced parts decide it, and the figure is fixed by expert examination.
What is the limitation period?
Two years from learning of the loss and the person responsible, and ten years in any event. Where the accident is also an offence, the longer criminal period may apply.