If you are buying a car in Japan: Guide to Japanese car insurance

photo by Pictures of Money

While you live in Japan for a long time, you may have a need to own a car. When you own a car in Japan, you need to have a car insurance in case of accidents or breakdown, just like you probably did when you own a car in your country. There are two types of car insurance in Japan: mandatory insurance and voluntary insurance. Car insurance is important to protect you from damages and injuries in an emergency situation. However, just getting a car insurance can be such a hard task if you are not confident in Japanese language. To help you clarify what to do when you choose a car insurance, this column will give you a brief overview on Japanese car insurance.

Purchasing a car insurance in Japan

There are two types of car insurance in Japan: “compulsory vehicle liability insurance (jibaiseki)” that every car owners are mandated to purchase, and “voluntary car insurance” that is optional. These two types of insurance are different in the following points.

Compulsory vehicle liability insurance (Jibaiseki)

Every title holder of a vehicle must purchase a compulsory vehicle liability insurance to cover his car. This insurance is to cover the injured in a car accident, no matter who was driving the insured car. However insurance benefit will not be paid if the driver has deliberately caused an accident and solely responsible, if injury or death has been caused due to self-inflicted accident, if injury or death has NOT been caused by contact with the insured vehicle, or if the injured or deceased is NOT a third party. The insurance benefits of compulsory vehicle liability insurance are specifies by the law as follows, therefore there is no difference among insurers.

Death: up to 30million yen
Injury: up to 1.2million yen
Residual disability: up to 30million yen

*The amount of insurance benefit payout may be reduced according to percentage of fault determination of the recipient.
* Compulsory vehicle liability (jibaiseki) insurance can be purchased through an insurance company, insurance broker, car dealer, automobile repair shop or District Transport Bureaus office.
*Sometimes a used car is still covered under the previous owner’s name after the ownership changed. In such a case, the insurance must be transferred to the current owner.

Voluntary car insurance

Voluntary car insurance is voluntarily purchased by an owner of vehicle to cover damages or injuries that compulsory vehicle liability insurance does not cover. It insures a driver against damages or injuries while compulsory vehicle liability insurance covers a vehicle. If a driver is not listed as the insured on the insurance contract, insurance benefits will not be paid at all (the insured can be appointed as “any driver”). Also, the amount of insurance benefits of voluntary car insurance is determined by each insurance company while compulsory vehicle liability insurance payout is flat rate based. The coverage of voluntary car insurance covers the following areas.

Compensation or injury that exceeds the policy limits of compulsory vehicle liability insurance
Property damage
Self-inflicted accident
Coverage for the insurance holder
Coverage when other driver has no insurance
Repair of damaged vehicle
Roadside service

Make sure to clarify how often you drive a car or purpose of use and list up coverages you need. It is important to consult insurance company staff to find the best policy for you.

Cost of voluntary car insurance

The amount of insurance premium of voluntary car insurance vary depending on age of driver, vehicle model, whether automobile physical damage coverage is included or not. Especially, age of driver considerably affects the amount of insurance premium. While age of 35 to 49 years drivers are allowed the lowest range of price, drivers under 20 years old typically pay twice more than them. Also, premiums start hiking by 5 to 7 percent every 5 years once drivers reach age of 50 years. Generally, annual insurance premium for driver over 25 years old falls into 50000yen to 150000yen.

Multi-lingual service

Car insurance is for protect yourself from detriments in a car accident. In Japan, most insurance company provide their services only in Japanese. However, in recent years, a few insurance providers started multi-lingual service in accordance with the increasing number of automobile accidents involving foreign nationals.

Mitsui Sumitomo Insurance

All insurance claim procedures including accident report and benefit payout can be made in 14 languages such as English, Chinese, Korean, French and German.

Sompo Japan Nipponkoa

All insurance claim procedures including accident report, settlement negotiation and benefit payout can be made in 14 languages such as English, Chinese, Korean, French and German.

Kyoei Fire & Marine Insurance

All insurance claim procedures including accident report and benefit payout can be made in 15 languages.

*These multi-lingual services are provided in three-way calling.
*Multi-lingual service is available only in accident handling, insurance claim and roadside service request. Other services are still provided only in Japanese.

Use insurance broker if not confident in Japanese language

As previously mentioned, all transactions and documents including getting an insurance, claiming benefit and insurance policy will be done in Japanese. Online or mail applications are done by Japanese as well, therefore customer need to be able to read and write in Japanese. But this is quite a hard task when you are not confident in Japanese language. If you want to have an insurance in Japan without using Japanese language, simply use an insurance broker. They will quote, answer your inquiries and arrange roadside service in English.

JAPAN INSURANCE NET
Relo Financial Solutions

Just in case anything goes wrong

Getting a car insurance is a little troublesome because all documents are written in Japanese. If you are not fluent in Japanese, it can be a really hard task. Also, calling an insurance company and talk to an operator in Japanese can be even harder when you are upset about an accident. To ensure you make all procedures correctly, it is important to choose an insurance company that provides multi-lingual services. Also, it is best to use an insurance broker to assist in making an insurance contract or claim, if you don’t have anyone else who can help you.