Can you claim interest when an insurance company pays compensation late in Turkey? Learn when insurers fall into default, when interest starts, how late-payment interest is calculated, and how policyholders can recover unpaid interest in 2026.

When an insurance company delays payment of compensation in Turkey, the policyholder may be entitled to recover interest in addition to the principal insurance compensation. This can become financially significant where a claim remains unpaid for months or years. Under Article 1427 of the Turkish Commercial Code No. 6102, once insurance compensation becomes due, the insurer falls into default without requiring a separate notice. The same provision also states that contractual terms attempting to release the insurer from its obligation to pay default interest are invalid. This means that an insurer generally cannot avoid the financial consequences of late payment merely by inserting a clause into the insurance policy stating that no interest will be payable. However, determining the correct interest claim requires answering three separate questions: When did the insurance compensation become due? When did the insurer fall into default? Which interest rate applies to the particular insurance dispute?

When Does Insurance Compensation Become Due?

The starting point is Article 1427 of the Turkish Commercial Code. Insurance compensation generally becomes due after the insured event has occurred, the documents concerning the insured event have been provided to the insurer and the insurer has completed its investigation concerning its payment obligation. The statute also provides that compensation generally becomes due, in any event, 45 days following notification of the insured event under Article 1446. For life insurance, the statutory period is 15 days. If the investigation is delayed because of circumstances not attributable to the insurer, however, the relevant period does not run during that delay.

Does the Insurer Need a Separate Warning Before Interest Starts?

Under the general insurance rule, once the insurance debt becomes due, Article 1427/4 provides that the insurer falls into default without requiring a separate notice. This is important because policyholders sometimes assume that they must send a second notarized warning specifically stating, “You are now in default and interest will begin.” That is not necessarily required where Article 1427 applies and the insurance compensation has legally become due.

Can the Insurance Policy Say That No Interest Will Be Paid?

Article 1427/5 directly addresses this issue. A contractual provision purporting to relieve the insurer from its obligation to pay default interest is invalid. Therefore, an insurance company cannot simply use standard policy wording to eliminate a statutory interest obligation once the conditions for default have arisen.

Why Is the Default Date So Important?

The default date determines when interest begins to accumulate. Consider an insurance company that ultimately pays TRY 3,000,000 of compensation but does so many months after the debt became due. The dispute may no longer concern the TRY 3 million principal because that amount has already been paid. However, the policyholder may still have a substantial claim for interest relating to the period of delay. Consequently, establishing the correct default date can be almost as important as calculating the underlying insured loss.

Does Interest Always Begin on the Date of the Accident or Loss?

No. This is a common misunderstanding. The occurrence of the insured event and the insurer’s default are not necessarily simultaneous. In many insurance disputes, the insurer must first receive notice and the documents required to investigate the claim. The applicable statutory or contractual payment period must then be considered. Therefore, the date of a fire, accident, flood or machinery breakdown should not automatically be used as the interest commencement date.

What Happens Under the General 45-Day Rule?

For insurance claims governed by the general TCC Article 1427 framework, compensation becomes due after the insurer completes its investigation following receipt of the relevant documents and, in any event, generally within the statutory 45-day framework following notification. Once the debt becomes due, the insurer falls into default without a separate notice. aregional appellate decision has similarly applied Article 1427 when determining the appropriate commencement date for interest on insurance compensation.

Can Interest Start Before 45 Days?

Potentially. Article 1427 does not simply provide the insurer with an unconditional 45-day payment holiday. The provision states that compensation becomes due when the insurer completes the necessary investigation after the insured event and submission of relevant documents, while also establishing the general 45-day framework. The circumstances of the claim therefore need to be examined rather than automatically adding 45 days in every case.

What If the Insurer Delays Because Documents Are Missing?

This can affect the interest calculation. Article 1427 expressly states that where the investigation is delayed because of circumstances not attributable to the insurer, the relevant period does not run during that delay. (Mevzuat MTurkoglu) For example, if the insurer reasonably requests a critical engineering report or proof of ownership and the claimant fails to provide it for several months, those circumstances may affect the default analysis.

Can the Insurer Keep Asking for Documents to Avoid Interest?

Not simply for the purpose of delaying payment. There is a difference between genuinely necessary documentation and repetitive or irrelevant requests. The claimant should preserve every document request and proof showing when each document was provided. If litigation or arbitration later arises, the chronology can demonstrate whether the delay resulted from an incomplete claim file or from the insurer’s own handling of the claim.

What If the Insurance Company Rejects the Claim?

A rejection does not necessarily protect the insurer from interest. If the rejection is later found to have been legally incorrect and compensation was already due, interest may potentially run according to the applicable default rules. In one appellate decision involving insurance compensation, the court concluded that the insurer’s rejection communication demonstrated that default had occurred no later than the date of rejection and corrected the interest commencement date accordingly. (İctihatlar)

What If the Insurance Company Pays Only Part of the Claim?

Interest can potentially be claimed on the unpaid balance. Suppose the legally payable insurance compensation is TRY 2,500,000 but the insurer pays only TRY 1,700,000. If the remaining TRY 800,000 is later awarded through arbitration or litigation, applicable interest may potentially be claimed on that unpaid amount from the legally determined default date.

Can Interest Be Claimed on an Underpaid Insurance Settlement?

Potentially, yes. The issue is not limited to situations where the insurer pays nothing. An insurer may pay compensation but incorrectly reduce it because of depreciation, an inaccurate expert valuation, an incorrect deductible, disputed underinsurance or omitted repair costs. If additional compensation is later determined to have been due, the interest consequences of the underpayment should also be examined.

What If the Insurer Pays the Principal After Legal Proceedings Begin?

Payment of the principal does not automatically erase an accrued interest claim. For example, a policyholder files an arbitration claim for TRY 1 million plus interest. The insurer then pays the TRY 1 million principal during the proceedings. The claimant may still need to determine whether accrued interest, costs or other ancillary claims remain unresolved.

Can Interest Be Claimed in Insurance Arbitration?

Yes, where the substantive conditions for interest are satisfied. A claimant before the Insurance Arbitration Commission should not focus exclusively on the principal amount. The application should identify the requested interest, legal basis and commencement date where possible. Failure to formulate the monetary demand correctly can unnecessarily complicate recovery of ancillary amounts.

Should the Arbitration Application Specifically Request Interest?

As a practical matter, yes. The claimant should clearly formulate the relief sought. Instead of simply demanding “TRY 750,000 additional compensation,” the claim should consider whether the request should include the principal amount together with applicable interest from the legally appropriate date. The exact wording should reflect the circumstances of the insurance relationship.

Can Interest Be Claimed in Court Proceedings?

Yes. Where an insurance dispute is pursued before the competent court, interest can form part of the monetary demand. The court may need to determine the appropriate default date and applicable interest type. Evidence demonstrating the insurer application date, document-submission dates and insurer response can therefore be critical.

What Happens If There Was No Application to the Insurer Before the Lawsuit?

This can materially affect the interest commencement date. Case law has recognized that where the insurer was not put in default before proceedings, interest may begin from the lawsuit date rather than an earlier date. (Hukuk Asistan) Consequently, a properly documented pre-litigation application can have substantial financial importance.

Traffic Insurance Has Special Rules

Compulsory motor liability insurance should be distinguished from the general insurance framework. Turkish case law applying Article 99 of the Highway Traffic Law has held that a traffic insurer is required to pay compensation within eight business days after the required documents and information have been properly submitted and that default occurs if payment is not made after that period. (İctihatlar) Therefore, a claimant should not mechanically apply the general 45-day TCC period to every traffic-insurance claim.

Example: Traffic Insurer Pays Late

Suppose the victim submits a complete compensation application to the traffic insurer on June 1. The necessary documents are complete and the statutory payment framework applies. The insurer pays months later. The claimant should calculate the insurer’s default date according to the special traffic-insurance rules rather than automatically using either the accident date or the general 45-day period. The correct starting date can substantially alter the final interest amount.

What Type of Interest Can Be Claimed?

This requires a case-specific analysis. The applicable interest may depend on the underlying legal relationship, whether the relevant transaction is commercial, the nature of the insured risk, the capacity of the parties and any valid contractual interest provisions. It is therefore incorrect to assume that every insurance dispute automatically carries the same interest rate.

Is Commercial Interest Always Available Because the Defendant Is an Insurance Company?

No. The fact that the defendant is an insurance company does not automatically mean that the highest commercial interest rate applies. The nature of the underlying obligation must also be considered. In motor-liability cases, for example, case law has distinguished between private and commercial vehicles when determining the appropriate interest. One Court of Cassation decision concluded that because the insured vehicle was private and commercial default interest could not have been demanded from the underlying tortfeasor, only legal interest could be demanded from the liability insurer. (İctihatlar)

What If the Insured Vehicle Is Commercial?

The analysis can be different where the underlying transaction or liability has a commercial character. The applicable interest type should therefore be determined according to the underlying legal relationship rather than by applying a single rate to every traffic-insurance dispute.

Important 2026 Change to the Statutory Interest Framework

The Turkish statutory-interest framework changed in July 2026. Law No. 7589 amended Article 1 of Law No. 3095 on Legal Interest and Default Interest. Under the amended provision, where interest is payable under the Turkish Code of Obligations or Turkish Commercial Code and the rate has not been contractually determined, the annual rate is now linked to 80% of the Central Bank’s short-term credit rediscount rate applicable on the preceding December 31. If the June 30 rediscount rate differs from the preceding December 31 rate by five percentage points or more, 80% of the June 30 rate applies for the second half of the year. (mevzuat.adalet.gov.tr) This 2026 amendment makes it especially important not to rely on older articles stating a fixed statutory interest percentage without checking the law applicable to the relevant period.

Does the 2026 Change Mean Every Insurance Claim Uses the Same Rate?

No. The amendment affects the statutory interest framework, but determining the correct rate for an individual insurance claim still requires identifying the nature of the obligation, any valid contractual interest provision, whether commercial rules apply and whether special legislation governs the claim. The interest commencement date and interest rate are separate questions.

What About Commercial Late-Payment Interest Under TCC Article 1530?

This rate should not automatically be confused with interest payable on insurance compensation. The Central Bank publishes a separate late-payment rate under TCC Article 1530 for late payments in transactions involving the supply of goods and services; the published rate for 2026 is 43%. (TCMB) An insurance compensation dispute does not automatically become a goods-and-services late-payment claim merely because the policyholder is a business. The correct statutory basis must therefore be identified before selecting an interest rate.

What If the Claim Is a Commercial Property Insurance Claim?

Commercial insurance disputes can involve substantial principal amounts, making the interest question financially significant. Suppose a factory insurer incorrectly refuses TRY 20 million of fire compensation for 18 months. Even a modest difference in the applicable interest rate or commencement date can materially change the final claim. Businesses should therefore calculate interest at the same time they calculate the principal insured loss.

Can Interest Be Claimed on Fire Insurance Compensation?

Potentially, yes. If the fire constitutes a covered insured event and the insurer’s compensation obligation has become due, late payment can trigger default-interest consequences under the applicable rules. The claimant should document the notification date, when requested documents were supplied and when the insurer completed—or should have completed—the necessary investigation.

Can Interest Be Claimed on Property Insurance Compensation?

Yes, potentially. The same fundamental maturity and default analysis applies. A dispute may involve building damage, contents, machinery, inventory or other insured property. If the insurer incorrectly refuses or delays a payable amount, interest should be considered alongside the principal claim.

Can Interest Be Claimed on Machinery Insurance?

Potentially. Machinery claims can take longer because complex engineering investigations may be necessary. Article 1427 expressly accounts for investigations delayed for reasons not attributable to the insurer. (Mevzuat MTurkoglu) The claimant should therefore distinguish genuine technical investigation from unnecessary administrative delay.

What Happens If the Investigation Takes More Than Three Months?

Article 1427 provides an additional protection. If the insurer’s investigation cannot be completed within three months following notification, the insurer must, subject to the statutory conditions, pay at least 50% of the rapidly ascertainable loss as an advance, to be deducted from the eventual compensation. (Mevzuat MTurkoglu) In substantial commercial losses, this provision can be important where final adjustment requires extensive technical work.

Can Foreign Policyholders Claim Late-Payment Interest?

Yes. Foreign nationality does not itself prevent an insured person, policyholder or other entitled claimant from seeking applicable interest on insurance compensation payable under Turkish law. Foreign individuals and companies should ensure that the claim chronology and evidence are properly documented, particularly where communications with the insurer occurred from abroad.

What Evidence Is Needed to Prove the Interest Starting Date?

The claimant should preserve the insurance policy, claim notification, proof of receipt by the insurer, list of documents submitted, subsequent document requests, insurer correspondence, expert reports, rejection letter and proof of any partial payments. These documents allow the default chronology to be reconstructed accurately.

Why Is Proof of Delivery So Important?

A claimant may know that the insurer received the application but still struggle to prove the exact date. Because a difference of several weeks or months can affect the interest calculation, evidence of receipt should be preserved. Electronic claim confirmations, registered correspondence, insurer document-registration records and other reliable evidence can become important.

Can the Insurer Argue That the Claim Was Incomplete?

Yes. This is one of the principal defences to an early interest commencement date. If documents genuinely necessary for investigation were missing, the insurer may argue that compensation had not yet become due. The claimant should therefore demonstrate not only when the initial claim was submitted but also when the claim file became sufficiently complete for the insurer to evaluate its obligation.

What If the Insurer’s Expert Delays the Report?

The claimant should determine whether the delay can legally be attributed to the insurer. Article 1427 protects the insurer where investigation is delayed because of circumstances not attributable to it. (Mevzuat MTurkoglu) Conversely, an internal delay caused by the insurer’s own claim-handling process should not automatically deprive the claimant of default consequences.

Can You Claim Interest After Accepting the Principal Compensation?

Potentially, depending on the circumstances. Receiving the principal and waiving all remaining claims are different things. However, if the claimant signs a broad settlement or release stating that principal, interest and all ancillary claims have been fully settled, the insurer may rely on that document. Any release should therefore be reviewed before signature.

What If the Settlement Document Says You Waive Interest?

This requires careful legal examination. Article 1427/5 invalidates contractual provisions designed to relieve the insurer from its default-interest obligation. (Mevzuat MTurkoglu) However, the legal effect of a settlement or release concluded after the dispute and after interest has accrued may raise different issues from a pre-formulated policy clause attempting prospectively to exclude default interest. The timing and wording of the document therefore matter.

Example: Late Payment of a Fire Claim

A foreign-owned business in Turkey suffers a covered fire. It submits the necessary documentation and claims TRY 12 million. The insurer eventually accepts the entire claim but pays months after the compensation became due. Even though there is no longer a dispute over the TRY 12 million principal, the business may still need to examine whether default interest accrued during the delay.

Example: Underpaid Vehicle Compensation

A vehicle insurer pays TRY 900,000 while the legally payable compensation is later determined to be TRY 1,200,000. The additional TRY 300,000 may potentially carry interest from the applicable default date. The claimant should therefore request both the compensation difference and the appropriate interest rather than focusing only on the principal shortfall.

Example: Claim Initially Rejected but Later Accepted

An insurer rejects a property claim entirely. Eight months later, after further expert examination, it accepts that TRY 4 million was payable. The fact that the insurer eventually reversed its position does not automatically eliminate the consequences of the earlier non-payment. The claimant should determine when the debt actually became due and calculate interest accordingly.

Example: No Pre-Litigation Application

A claimant suffers an insured loss but never submits a proper demand to the insurer before filing proceedings. Depending on the applicable insurance regime and circumstances, the insurer may argue that it was not previously placed in default and that interest should therefore begin only from the proceedings. Turkish appellate case law recognizes the importance of a proper pre-litigation application when determining the commencement of interest. (Hukuk Asistan)

Can Interest Become a Significant Part of a High-Value Insurance Claim?

Absolutely. Consider a multi-million-lira fire, cargo, machinery or commercial-property claim that remains unpaid for two years. The accumulated interest can represent a substantial additional amount. Ignoring the interest component may therefore cause a policyholder to accept significantly less than the total legal entitlement.

What Should Policyholders Do When an Insurer Pays Late?

The policyholder should reconstruct the entire timeline: date of insured event, notification date, claim application date, date each required document was submitted, expert examination dates, rejection or partial-payment date and final-payment date. The next step is to identify the legally applicable maturity and default rules and determine the appropriate interest type. Only then can the late-payment claim be calculated accurately.

2026 Legal Position in Turkey

In 2026, the fundamental rule remains highly favorable to policyholders: under TCC Article 1427, once insurance compensation becomes due, the insurer falls into default without requiring a separate warning, and policy provisions attempting to eliminate the insurer’s default-interest liability are invalid. (Mevzuat MTurkoglu) However, the interest calculation is not automatic. The claimant must determine the correct maturity date, consider whether delays resulted from circumstances attributable to the insurer and identify whether general insurance rules or special legislation—such as compulsory traffic-insurance provisions—govern the claim. The July 2026 amendment to Law No. 3095 also introduced a new variable methodology for statutory interest where no contractual rate has been established. (mevzuat.adalet.gov.tr) Accordingly, policyholders dealing with late compensation should not rely on an outdated fixed percentage or assume that interest begins on the accident date. The correct approach is principal compensation + legally correct default date + applicable interest type + applicable rate for the relevant period.

Frequently Asked Questions

1. Can I claim interest if my insurance company pays compensation late?

Yes, potentially. Once insurance compensation becomes due, TCC Article 1427 provides that the insurer falls into default without requiring a separate notice. (Mevzuat MTurkoglu)

2. Do I have to send a formal warning before claiming interest?

Under the general Article 1427 rule, not necessarily. Once the insurance debt becomes due, the insurer falls into default without a separate notice.

3. Does interest start on the accident date?

Not automatically. The applicable default date depends on the type of insurance, notification, submission of necessary documents and the relevant statutory framework.

4. When does ordinary insurance compensation become due?

Under the general TCC Article 1427 framework, compensation becomes due following completion of the necessary investigation after submission of relevant documents and, generally, within the statutory 45-day framework following notification, subject to delays not attributable to the insurer. (Mevzuat MTurkoglu)

5. Is traffic insurance different?

Yes. Compulsory motor liability insurance is subject to special provisions, and Court of Cassation case law applies an eight-business-day payment period after proper submission of the required information and documents. (İctihatlar)

6. Can I claim interest on only the unpaid part of compensation?

Potentially, yes. If an insurer pays part of the claim but wrongfully withholds the remainder, applicable interest may be claimed on the outstanding amount.

7. Can an insurance policy exclude default interest?

A policy provision attempting to release the insurer from its default-interest obligation is invalid under TCC Article 1427/5. (Mevzuat MTurkoglu)

8. Can foreign policyholders claim interest?

Yes. Foreign nationality does not itself prevent an entitled claimant from pursuing applicable late-payment interest under Turkish insurance law.

9. Did Turkish interest law change in 2026?

Yes. Law No. 7589 amended Article 1 of Law No. 3095 in July 2026 and introduced a variable statutory-interest methodology linked to the Central Bank’s rediscount rate. (mevzuat.adalet.gov.tr)

10. Can I claim interest through the Insurance Arbitration Commission?

Potentially, yes. Where the substantive requirements are satisfied, the arbitration demand can include the outstanding insurance compensation together with the applicable interest claim.

Legal Support for Late Insurance Compensation and Interest Claims in Turkey

Late insurance payments can create a substantial additional claim, particularly in high-value vehicle, fire, property, machinery, cargo and commercial insurance disputes. Determining the correct result requires careful calculation of the insurer’s maturity date, default date, applicable interest type and the amount remaining unpaid.

Fırat Fesih Kaya Law Office provides legal assistance to Turkish and foreign policyholders concerning delayed and underpaid insurance compensation, default-interest claims, rejected insurance claims, incorrect expert valuations and Insurance Arbitration Commission proceedings.

Fırat Fesih Kaya can assess the claim chronology, determine when the insurer fell into default, calculate the unpaid compensation and applicable interest, and pursue the resulting claim through insurance arbitration or the appropriate judicial procedure.

Phone: +90 312 434 22 22
Mobile Phone: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yildirim Tower, Balgat, Cankaya / Ankara, Turkey