A new era in mandatory traffic insurance has commenced in Turkey, with policies now being calibrated based on a damage cost index introduced by the Insurance and Private Pension Regulation and Supervision Authority (SEDDK). This shift took effect on May 1, following the announcement made in December 2023 regarding the implementation of the damage cost index.
The SEDDK’s initiative aims to protect policyholders’ interests and ensure the sustainability of the premium-insurance balance amidst changing economic conditions. The new pricing model will factor in monthly variations in minimum wage, spare parts, maintenance, and repair costs associated with motor vehicles.
Specifically, the index will be calculated monthly, taking into account 45% of the minimum wage increase, 30% of the price increase for spare parts and accessories, 15% for the overall increase in motor vehicle prices, and 10% for maintenance and repair cost changes for personal transport vehicles.
For May, the maximum increase in mandatory traffic insurance premiums has been capped at 3%, allowing insurance companies to adjust policy rates accordingly.
