Comprehensive car insurance policy numbers fall due to dropping Lira

THERE has been a 25 per cent fall in the number of comprehensive motor insurance policies being taken out due to the falling value of the Turkish lira, it has been reported.

The Turkish lira has slumped in value recently against the British pound and other major currencies. One TL is now worth less than 10p.

The head of the TRNC Insurance and Reinsurance Companies’ Union, Ülker Fahri, said that while insurance cover and premiums are payable in Turkish lira, the amounts are based on the sterling value of the vehicles.

“Three or four months ago a car that cost £10,000 would correspond to 70,000TL cover and a fully comprehensive insurance policy would cost about 2,700TL, including the compulsory insurance expenses,” he said.

“However, the same car would be valued at 100,000TL [based on the current exchange rates] and its full insurance will cost 3,600TL including the compulsory insurance expenses.

“Due to the increasing [British] pound currency rates and the loss in value of the Turkish lira, the rise in insurance fees has led to a 25 per cent reduction in the number of fully comprehensive [motor] insurance policies being taken out in the last six months.”

Mr Fahri also said that 7,000 new cars had been imported to North Cyprus lately after the government reduced vehicle taxes and that “75 per cent” of them had been purchased with loans.

“Another problem that insurance firms encounter is that the banks which provide the loans oblige their clients to take out policies with their own contracted insurance providers,” he added.