Optional Car Insurance in Japan
When you buy a car, be it brand new or used, part of the cost is made up by mandatory insurance (強制保険料). However, this insurance does not provide full coverage in the case of an accident. It is strongly recommended to purchase additional, optional car insurance so that you are not hit with a huge bill later on down the track.
This is of course easier said than done. The language barrier between foreigners and the insurance companies is a big deterrent to obtaining this type of insurance. It is also a relatively complicated process to wade through all the paper work. Even Japanese people often just go with the company their car dealer recommends without doing any research.
As many foreigners buy their cars privately, this option is not available, and even if it were, it's not the most cost effective way to get insurance. As with all major purchases, it's best to shop around. Prices can range from only 20,000 yen up to many hundreds of thousands, depending on the model of the car and the age of the driver. You want to get the best deal that suits you.
Remember, it is very rare for 100% of blame to be placed on one party in the case of an accident. Even if you think you are a great driver and you will not cause any accidents, the people around you may. Ibaraki is well known to have some of the most dangerous drivers in Japan.
Types of coverage
Within any insurance contract, there are a number of variables that can be tailored to meet your needs and budget.
- Bodily injury liability cover (対人賠償責任保険金額) This insurance covers the medical expenses of other driver/s if you cause an accident. This is an extension of your liability under the compulsory insurance. It is best to set this variable to "unlimited" (無制限) as you will be personally liable to pay the excess medical expenses if it goes over the set amount. Medical expenses can be very expensive in Japan.
- Property damage liability cover (対物賠償責任保険金額) This insurance covers any damaged to public or private property. It is also a good idea to have this set to "unlimited" as who really knows how much that power pole or old lady's house you ran into will cost! This insurance also covers the cost of the other cars involved in the accident, but not your own.
- Passenger injury compensation cover (搭乗者傷害保険金額) This insurance covers the medical expenses of other people in the other car (other than the driver) at the time of an accident.
- Personal injury compensation cover (人身傷害補償金額) This insurance covers any personal medical expenses or expenses of people in your car. If you have private medical insurance, like many JETs and English teachers do, you do not need to pay the premium for this insurance as it should already be covered privately. However, you should check the conditions of your current policy to make sure it covers accidents that are your own fault. Many medical insurance polices limit the cover in this case. You don't want to find out too late
- Physical damage cover (車両保険) This insurance is optional. If your car is worth a lot of money, then this insurance would be a good idea as it will cover the cost of your car being replaced or repaired up to the agreed value. If you drive an older car, then it may not be worth paying this premium as second hand cars are very cheap in Japan and an agreed value for such a car may not be worth it.
Other factors in price
Depending of whether you use your car for leisure or commuting makes a big difference in the price of insurance. If you don't use your car to get to work, you can save sometimes up to 10,000 yen on the premium.
For some reason, if you bought your car from a dealer, the premium is also slightly reduced.
The longer you have had your license, the cheaper the insurance. Most companies do not have a special category for international driver's licenses. Their categories are gold (5 or more years), blue (3-5 years) and green (0-3 years). If you have just changed over from the International Driver's license to a Japanese license, you will have a green license.
Similar to the license discounts, the older you are the cheaper. Set the age condition to the highest possible age that will still cover you. You can also set a condition so that only you will be covered. If you do this, make sure you don't let anyone else drive your car.
Ratings
The entry level into the Japanese rating system is Level 6 and comprises of 20 levels all up. Sadly, your insurance rating from back home will make no difference over here.
Every year if you have had no accidents, you can graduate to the next level. If you have an accident, you will automatically drop down 3 levels. Each level refers to a different percentage discount on your premium. The following table is an example of how it may work for your insurance company. It is only a guide.
| Rating | Discount |
|---|---|
| 1 | 60% increase |
| 2 | 30% increase |
| 3 | 20% increase |
| 4 | No discount |
| 5 | 10% discount |
| 6 | 10% discount |
| 7 | 20% discount |
| 8 | 30% discount |
| 9 | 40% discount |
| 10 | 40% discount |
| 11 | 45% discount |
| 12 | 50% discount |
| 13 | 50% discount |
| 14 | 55% discount |
| 15 | 55% discount |
| 16 | 58% discount |
| 17 | 58% discount |
| 18 | 60% discount |
| 19 | 60% discount |
| 20 | 60% discount |
Where to buy insurance
There are a few companies that deal in English, but the majority doesn't. Try and find a Japanese person who is willing to help you, such as your supervisor.
JapanInsurance.net
, underwritten by AIU, offers English language car insurance services to the foreign community in Japan, but is slightly expensive as it is pay by the month. Most Japanese companies only offer one year, one-off payment plans, which end up slightly cheaper.
Apart from that, websites that allow you to simultaneously obtain and compare quotes from a dozens of companies are very useful, though only in Japanese. You can change the variables, such as limits of liabilities, to see how it will affect the final price. The vocabulary list at the end of this page should be useful to help you navigate with the help of a Japanese person.
- Insweb (https://www.insweb.co.jp/)
- Bang (http://www.bang.co.jp/)
- Carview (http://www.carview.co.jp/service/insurance/default.asp)
Good luck, and hopefully you will never have to use the insurance you have bought!
Additional Vocabulary list
| Japanese | Kana | English Meaning |
|---|---|---|
| 保険 | ほけん | Insurance |
| 自動車 | じどうしゃ | Automobile |
| 初度登録年月 | しょどとうろくねんげつ | Date of first registration |
| メーカー名 | メーカーめい | Maker Name |
| 車名 | しゃめい | Model |
| 型式 | かたしき | Make |
| 保険契約の加入状況 | ほけんけいやくのかにゅうじょうきょう | Current insurance condition |
| 主たる使用目的 | しゅたるしようもくてき | Main purpose of car |
| 月の使用日数 | つきのしようにっすう | Number of days of use per month |
| 予想される年間走行距離 | よそうされるねんかんそうこうきょり | Estimated distance per year |
| 主たる運転地域 | しゅたるうんてんちいき | Main driving region |
| エアバッグ | エアバッグ | Airbags |
| ABS | ABS | ABS brakes |
| 改造車 | かいぞうしゃ | Modified Car |
| 保険契約開始日 | ほけんけいやくかいしび | Start of insurance period |
| 納車日 | のうしゃび | Delivery of car |
| 氏名 | しめい | Name |
| 生年月日 | せいねんがっぴ | Date of birth |
| 性別 | せいべつ | Gender |
| 婚姻状況 | こんいんじょうきょう | Marital Status |
| 職業 | しょくぎょう | Occupation |
| 普通免許取得年月日 | ふつうめんきょしゅとくねんがっぴ | Date of gaining license |
| 免許証の色 | めんきょしょうのいろ | Color of license |
| 免許停止、免許取消処分の有無 | めんきょていし、めんきょとりけししょぶんのうむ | Suspensions, cancellations of license |
| 車の所有者 | くるまのしょゆうしゃ | Owner of car |
| 住所 | じゅうしょ | Address |
| 電話番号 | でんわばんごう | Phone number |
| 電子メールアドレス | でんしメールアドレス | Email address |
| 対人賠償責任保険 | たいじんばいしょうせきにんほけん | Bodily injury liability cover (2nd person) |
| 対物賠償責任保険 | たいぶつばいしょうせきにんほけん | Property damage liability cover |
| 搭乗者傷害保険 | とうじょうしゃしょうがいほけん | Passenger injury compensation (3rd person) |
| 人身傷害補償 | じんしんしょうがいほしょう | Personal injury compensation (1st person) |
| 車両保険 | しゃりょうほけん | Physical damage insurance (car body) |
| 年齢条件 | ねんれいじょうけん | Age condition |
| ファミリーバイク特約 | ファミリーバイクとくやく | Family Bike (moped/scooter) supplementary contract |
| 家族限定（運転者家族限定）特約 | かぞくげんてい（うんてんしゃかぞくげんてい）とくやく | Family supplementary contract |
| お車は 自動車販売業者（法人）で購入しましたか | おくるまは じどうしゃはんばいぎょうしゃ（ほうじん）でこうにゅうしましたか | Did you buy your car at a dealer? |
| 等級 | とうきゅう | Rating |