Kasko Insured Value and Diminished Value: How Is Your Car Valued?
The two concepts most often confused around a Kasko (comprehensive) insurance policy actually work in completely independent ways: the Kasko insured value is the sum insured up to which your insurer covers damage to your own vehicle, while diminished-value compensation is an entirely different right, and it is usually claimed from the Zorunlu Trafik Sigortası (mandatory traffic/third-party liability insurance) of the at-fault other party in an accident. Mixing up these two concepts can get expensive both when reading your policy and when deciding which claim to direct to which insurer after an accident. In this article we explain, based directly on the Kara Araçları Kasko Sigortası Genel Şartları (General Conditions for Land Vehicle Kasko Insurance) and the Karayolları Motorlu Araçlar Zorunlu Mali Sorumluluk Sigortası Genel Şartları (General Conditions for Compulsory Motor Vehicle Third-Party Liability Insurance), how the Kasko insured value is determined, why underinsurance/overinsurance works differently under Kasko, who diminished-value compensation is claimed from and how, and how payment is made in the event of a total loss (pert).
Kasko insured value: what value does the insurer protect your car up to?
The amount corresponding to the coverage in your Kasko policy is called the Kasko insured value (sigorta bedeli), and — contrary to common assumption — this is not a single lira figure fixed once when the policy is issued. Under the General Conditions for Land Vehicle Kasko Insurance, "the insurer covers the vehicle up to its market value as of the date of the loss," and the value used to calculate compensation is not the value on the date the policy was issued, but the market value on the date the risk materialized (i.e., the date the damage occurred) (TSB (Insurance Association of Turkey) — General Conditions for Land Vehicle Kasko Insurance). The standard policy template mandated by the General Conditions makes this clear as well: the insured-value section does not state a specific amount; instead it carries the wording "the insurer covers the vehicle up to its market value as of the date of the loss" (TSB). The reference used to determine this market value — for example, a Kasko value list or market sale listings — is specified in the policy; if the policy does not specify a concrete reference, the reference market values to be determined under the relevant regulatory framework apply instead (TSB). Which coverages are included in this insured value depends on the specific product you purchased — we cover the coverage differences between narrow (dar) Kasko, standard Kasko, extended Kasko, and full (tam) Kasko in detail in our Kasko types article.
Why doesn't underinsurance or overinsurance apply in most Kasko policies?
The classic "underinsurance" risk in insurance law works like this: if the insured value stated in the policy falls below the actual value at the time of loss, the insurer pays the loss in proportion to these two amounts — meaning the policyholder ends up bearing the difference themselves; the reverse case (insured value above the actual value) is "overinsurance." Under Kasko this risk is largely eliminated, because as explained above the insured value is not a pre-fixed number in the first place — it is the market value itself as of the date of the loss, so there is structurally no fixed-vs.-actual value gap of the kind described above. For this reason, the standard policy template mandated by the General Conditions is required to separately include the statement "underinsurance/overinsurance shall not apply in the event of a loss" (TSB). Even so, it is worth checking the special conditions in your policy and any deductible (muafiyet) rates — deductibles should not be confused with underinsurance: a deductible is a fixed amount or percentage agreed in advance in the policy that the insurer will never compensate, not a proportional post-loss calculation like underinsurance (TSB).
Diminished-value compensation: a right entirely separate from the Kasko insured value
Diminished-value compensation (değer kaybı tazminatı) is a concept frequently confused with the Kasko insured value, but its legal basis is entirely different. The Kasko insured value is the coverage amount your own Kasko policy provides for your vehicle; diminished value, on the other hand, is the permanent drop in market value that occurs after a traffic accident even once your vehicle has been repaired, and this compensation is usually claimed from the compulsory traffic insurance (Zorunlu Trafik Sigortası) of the at-fault other party — not from your own Kasko policy. The General Conditions for Compulsory Motor Vehicle Third-Party Liability Insurance regulate diminished value under the heading "Property Damage Coverage": the direct property loss suffered by the beneficiary, including the diminished value of the damaged vehicle, is determined by an insurance expert appointed according to the procedures and principles set by the competent authority, taking into account the vehicle's make, age, model, level of use, the parts that were damaged, its prior damage history, and the difference between its pre-accident used-market sale value and its post-repair used-market sale value (mevzuat.gov.tr — General Conditions for Compulsory Motor Vehicle Third-Party Liability Insurance). Under the same General Conditions, a beneficiary who applies for vehicle damage is automatically deemed to have also filed a diminished-value claim, and the insurer is obligated to notify the beneficiary of the calculated diminished-value amount within the business day following the date the final expert report reaches it (mevzuat.gov.tr).
There is an exception here that is easy to miss: the same General Conditions exclude diminished-value claims for vehicles that have been withdrawn from traffic or scrapped due to damage — i.e., vehicles declared a total loss (pert) — from coverage (mevzuat.gov.tr), since total-loss compensation has already been paid for such a vehicle, and a "reduction in remaining value" cannot be defined in the first place. Finally, it should be made clear that your Kasko policy does not compensate the difference between your own vehicle's pre- and post-accident market value — Kasko only covers the cost of repair or replacement for the damage itself. We cover the scope of compulsory traffic insurance and how it differs from Kasko more broadly in our Traffic Insurance Guide.
Total loss (pert): how is payment made when repair no longer makes economic sense?
The Kasko General Conditions define when a vehicle is deemed to have suffered a "total loss" (pert) using two conditions: the repair cost must exceed the vehicle's value as of the date the risk materialized, and it must additionally be established by an expert report that the vehicle has become unrepairable (TSB). Unless both conditions are met together, the vehicle is not deemed a total loss — a high repair cost alone is not sufficient by itself. Once a total-loss determination is made, the insurer will not pay compensation until it is presented with a scrap registration document confirming the vehicle has been scrapped in accordance with the relevant legislation; for severely damaged vehicles that are repairable according to the expert report, a registration document stamped "withdrawn from traffic" is required instead (TSB). If the beneficiary wishes, they may keep the vehicle in its damaged state (salvage retention, sovtaj); in that case the insurer pays as compensation the difference between the vehicle's market value on the date of the risk and its damaged-state value (TSB). When a total loss occurs, insurance coverage under that policy ends and the insurer becomes entitled to the full premium; in a partial loss, however, the Kasko insured value is reduced by the amount of compensation paid (TSB).
What should you watch for in your policy?
Before signing your policy, checking whether the insured-value section states in writing which market-value source will be used, what the deductible rates are, and which type of Kasko — narrow, extended, or full — you are purchasing will help you avoid surprises at the time of a loss and correctly direct a separate right like diminished-value compensation to the right insurer. For a broader look at the scope of Kasko and traffic insurance, their coverage types, and pricing logic, you can check our Kasko Insurance Guide page.