Articles 1472 and 1481 of the Turkish Commercial Code No. 6102 (« TCC ») regulate the principle of subrogation in property insurance and liability insurance, respectively. The right of recourse arising from the principle of subrogation is that in the event of an occurrence of a risk, the insurer shall take the place of the insured after paying the indemnity to the insured and shall become the new holder of all the rights of the insured against the third party/parties who caused the occurrence of the risk.
In order for the insurer to claim the right of subrogation, the following conditions shall be met cumulatively according to the aforementioned provisions of the TCC and Article 127 of the Turkish Code of Obligations No. 6098 (« TCO ») regulating subrogation:
- There must be a valid insurance contract between the insurance company and the insured
- A loss covered by the insurance must have been realized
- The insurance company must have paid the insurance indemnity to the insured under the contract
- The insured must have the right to file a lawsuit against the responsible party and claim compensation
The amount of recourse that insurance companies may claim is limited to the amount of compensation paid to the insured. This amount shall also affect the insured’s rights against the responsible party. That is to say, it is not possible for the insured to claim the part of the loss paid by the insurer to the responsible party from them. This is a consequence of the prohibition of unjust enrichment.
On the other hand, the rights of the insured remain for the part of the loss not paid by the insurer. In this case, the insured may claim the part of the loss exceeding the amount of compensation paid by the insurer from the responsible party for damages.
In order for the insurer to effectively use its right of recourse against the person who caused the occurrence of the risk, the Legislator has imposed certain obligations on the insured (and also on the victim in liability insurances). Accordingly, the insured (and the victim in liability insurances) shall be liable to the insurer if the insured acts in violation of the rights of the insurer. For example, if the insured undertakes not to make a claim for compensation against the responsible party, releases the responsible party, or transfers the compensation claim to someone else, then the insured shall be held responsible against the insurer.
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