What Is an Insurance Policy and How Is It Issued?

Is a Policy the Same Thing as the Contract?

A policy and an insurance contract are not the same thing. Article 1401 of the Turkish Commercial Code defines the insurance contract as one under which the insurer undertakes, against a premium, to indemnify a loss to a financially measurable interest on the occurrence of the risk, or to pay a sum. The policy is the document that evidences that contract.

The distinction has a practical consequence: the contract may already be in force while the policy has yet to reach you. Article 1424(3) addresses this directly, providing that where no policy has been issued, proof of the contract is governed by the general rules of evidence.

Where you do hold the policy, however, it frames the discussion. Scope of cover, limits, deductibles, duration and the rights of the parties are all read off that document. The day you receive it is the day to read it, not to file it.

How Soon Must the Policy Be Handed Over?

Article 1424 sets a firm deadline. Where the contract has been concluded by the insurer or its agent, a policy signed by authorised persons must be given to the policyholder within twenty-four hours of conclusion; in other cases within fifteen days. The insurer is liable for loss caused by late delivery.

The same article covers loss of the document: a policyholder who loses the policy may ask the insurer for a replacement, at the policyholder's own cost.

The policy does not arrive alone. Article 1423 requires the insurer and its agent, before the contract is concluded and allowing a reasonable period for review, to notify the policyholder in writing of all information relating to the contract, the insured's rights and the provisions calling for particular attention. The Regulation on Disclosure in Insurance Contracts requires the Disclosure Form to be handed over before conclusion and states that these duties apply to the insurer's agents as well.

The consequence of failing to give the disclosure statement is also in the Code: under article 1423(2), where no statement has been given and the policyholder has not objected to the making of the contract within fourteen days, the contract takes effect on the terms written in the policy. The burden of proving that the statement was given rests on the insurer.

• Disclosure Form: handed over before conclusion; summarises scope, operation and claims-payment rules. It is drawn up in at least two copies and given against signature, and that signature is rebuttable evidence that the policyholder was informed.
• Disclosure statement: made in writing before conclusion, with a reasonable period allowed for review (TCC art. 1423).
• Policy: delivered within twenty-four hours where the insurer or its agent concluded the contract, otherwise within fifteen days (TCC art. 1424).
• General conditions and the claims document list: supplied by the insurer on request, during negotiation or during the contract.

What Must the Policy Contain?

Article 1425 states the content requirement in a single sentence: the policy contains the rights of the parties, the provisions on default, and the general and any special conditions, and is drawn up so as to be read comfortably and easily.

Article 11 of the Insurance Law completes the frame. The main body of the contract follows approved general conditions applied uniformly by insurers; special conditions may be added where the business requires it, but they must be shown on the policy under a special conditions heading, clearly and without creating confusion.

The fourth paragraph of that article gives the single most useful rule for reading a policy: excluded risks must be stated expressly, and risks not stated as excluded count as covered. The fifth paragraph adds that foreign words may not be used in contracts, the Turkish equivalents determined by the Turkish Language Association being the rule.

If the Policy Diverges From the Proposal, Which Prevails?

This is among the questions agencies hear most often, and the Code answers it. Under article 1425(2), where the content of the policy or of endorsement annexes differs from the proposal or from the agreed terms, those provisions that appear in the policy, differ from the proposal and are stipulated against the policyholder, the insured or the beneficiary are invalid.

The rule runs one way only: a divergence to the insured's detriment falls away, while one in their favour survives. Keeping the proposal and comparing the two documents when the policy arrives is what makes that protection usable.

The third paragraph deals with changes to general conditions. Unless a statute provides otherwise, a change in the general conditions that favours the policyholder, the insured or the beneficiary applies immediately and directly. If the change calls for an additional premium, the insurer may request the difference within eight days of the change; if it is not accepted within eight days, the contract continues on the former general conditions.

When Does Cover Start, and What if the Premium Is Not Paid?

Holding the policy and being on cover are not the same moment. Under article 1421, unless otherwise agreed the insurer's liability begins with payment of the premium or of its first instalment; in insurances relating to the carriage of goods by land and sea, the insurer becomes liable on conclusion of the contract.

How the premium is paid is also settled. Article 1430 provides that, absent contrary agreement, the premium is paid in advance and in cash; provided the first instalment is paid in cash, negotiable instruments may be given for later premiums, in which case payment occurs on collection of the instrument. Article 1431 requires the first instalment to be paid as soon as the contract is made and against delivery of the policy.

Non-payment has graded consequences. Under article 1434, where the first instalment or a premium payable in one sum is not paid on time, the insurer may withdraw from the contract within three months. Where a later instalment is missed, the insurer serves notice through a notary or by registered letter granting a ten-day period; if the debt is still unpaid at the end of that period, the contract is terminated.

Where the contract ends, premiums paid for the unexpired days are as a rule refunded (art. 1419). Limitation of claims arising from the contract is governed by article 1420.

Is an Electronic Policy Valid, and How Do You Verify It?

Insurance contracts may be concluded, whether directly or through an agency, using any means of communication that lets the parties agree without meeting. The regulation governing this states expressly that the duty to deliver a policy under article 1424 continues for distance contracts too.

The same provision defines electronic delivery: provided article 1425 is complied with, the policy may be given through a Durable Medium. That term covers SMS, e-mail, the internet, disks, memory cards and structures established through the Insurance Information and Monitoring Centre (SBM) or the e-Government gateway, in each case allowing the information to be stored for a reasonable period, examined for its purpose and copied without alteration.

An electronic policy is therefore a valid alternative to paper; the conditions are that it meets the content rules and reaches you in unalterable form. Those concluding distance contracts must also use 3DSecure for collections by debit or credit card.

Verification runs through two doors. The Disclosure Regulation requires insurers to build the infrastructure giving daily online access to the current state of policy information and claims transactions. Alongside that, the Insurance Information and Monitoring Centre offers e-Government services letting you query your own motor, life, health and professional indemnity policies.

What We Do as an Agency in the Policy Process

As an insurance agency our work is to obtain quotations from the insurers we act for, to discharge the disclosure duty, and to read the gap between proposal and policy with you once the document arrives. The policy is issued, and any claim paid, by the insurance company.

A large share of the questions we receive come not from the policy itself but from a skipped step in the sequence: a proposal signed before the disclosure form was given, a policy filed unread, an endorsement that cannot be compared because the proposal was not kept. Completing those three steps in order removes most later disputes.

If you would like us to go through your policy line by line, the links below lead to the relevant product pages.

Frequently Asked Questions

Sources

• Turkish Commercial Code, Book Six on Insurance Law — Insurance Association of Türkiye
• Insurance Law No. 5684 — Turkish Legislation Information System
• Regulation on Disclosure in Insurance Contracts — Insurance Association of Türkiye
• Regulation on activities treated as insurance business, contracts for the benefit of consumers and distance insurance contracts — Insurance Association of Türkiye
• Insurance Information and Monitoring Centre — e-Government policy enquiry services

This article is for information only; the scope of cover is set by the policy’s specific and general terms.