Rental and Leased Cars: Who Arranges the Insurance and What Happens After Damage?

More people and companies now rent or lease cars instead of buying them. In business districts such as Maslak, many companies provide long-term rental cars to employees, and many expats rely on rental or leased cars rather than buying a car in Turkey. Individuals also rent short-term on holiday or while their own car is in the workshop. Because the owner and the user are different, insurance is shaped by the contract. This guide explains who arranges the insurance in short-term rental, long-term rental and leasing, and what happens after damage.

Know which model you are in

• Short-term rental: daily or weekly rentals. The car belongs to the rental company, which arranges the insurance.
• Long-term rental: usually for companies, paid monthly. Insurance is often part of the rental package; scope depends on the contract.
• Leasing: the leasing company owns the car during the contract; you have the right to use it and may take ownership at the end. Who arranges and pays for insurance is set in the contract.

Insurance in short-term rental

The rental company arranges compulsory traffic insurance under Law No. 2918, and usually provides kasko (comprehensive motor insurance) or similar damage protection. How much you are liable for after damage is set in the rental agreement. Companies may offer extra protection packages that reduce your liability; whether these are insurance policies or contractual liability waivers, and what they include and exclude, varies from company to company.

Before signing, read these clauses:

1. The amount or excess you bear if the car is damaged,
2. What the extra protection covers, including glass, tyres and the underbody,
3. What happens if a driver not named in the agreement uses the car,
4. How liability changes with drink-driving or serious speeding,
5. Whether the car may be taken abroad,
6. Whom to call after an accident, and how quickly.

Foreign renters should also check the licence requirements and whether their foreign licence is accepted. At pickup, make sure existing scratches, dents and chips are recorded on the handover form and photograph the car from every side; most return disputes stem from skipping this.

Insurance on leased cars

Leasing contracts usually require kasko, because the leasing company owns the car and wants to protect it. The leasing company is usually named in the policy as loss payee. In practice:

• Repairs may need to be handled with the leasing company’s knowledge,
• In a total loss or theft, the payout goes to the leasing company first,
• Failing to renew or cancelling the policy may breach the contract,
• The choice of insurer or cover may need the leasing company’s approval.

If you have a choice, comparing covers pays off over the contract term. To see which add-ons are worth having, read which kasko extras are actually worth it.

Does your own kasko cover a rental car?

Your own kasko, as a rule, covers the car defined in your policy; it does not automatically extend to another car you rent. If you are using a rental while your car is being repaired, clarify whether it is a kasko replacement car or a separate rental agreement, as the liability rules differ.

After an accident in a rental or leased car

1. Stay safe and create a record: complete a joint accident report or call the police if needed.
2. Inform the owner immediately: call the rental or leasing company’s claims line; most contracts set a notification period.
3. Follow instructions: the company may decide which garage to use; do not arrange repairs yourself.
4. Keep the documents: the report, photos and correspondence are decisive in liability discussions.

If the other driver was at fault, the damage is claimed from their traffic insurance, usually through the company that owns the car. If you were at fault, the other side is paid by the car’s traffic insurance, and your contractual liability depends on the rental or leasing agreement.

A note for companies

Companies providing rental cars to staff should set a vehicle-use policy and give employees written instructions for accidents. Clarity on traffic fines, damage liability and driver restrictions protects both the company and the employee.

For a kasko quote on a leased car, or to review the insurance clauses in your rental agreement, see our comprehensive car insurance (kasko) in Maslak page. Call us on +90 530 375 89 61 or send a message on WhatsApp — English support is available.