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Home Insurance Situation in Japan! Insurance and types of insurance for foreigners.

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If you live in Japan and rent an apartment or buy a house, you must purchase home insurance such as fire insurance and earthquake insurance. In most cases, financial institutions require you to purchase home insurance when you take out a mortgage loan.

This article provides a detailed explanation of Japan's main home insurance policies, fire insurance and earthquake insurance, including their contents and differences. For foreigners, the Japanese insurance system may be complicated and difficult to understand. Therefore, we will focus on key points and explain them in an easy-to-understand manner so that foreigners can purchase home insurance with peace of mind.

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Can foreigners purchase home insurance?

When a foreigner buys or rents an apartment or house in Japan, he or she may be concerned about whether he or she can obtain insurance.

But don't worry. Foreign nationals can enroll in the same housing insurance program as Japanese nationals! However, the conditions for enrollment are that you must have a residence card, be able to read and write Japanese, and have a Japanese bank account.

Particularly with regard to Japanese, the ability to read and understand the contents of the contract is required. Please note that a katakoto level of Japanese language ability may not be sufficient. If you are not confident in your Japanese, we recommend that you first consult with your insurance company. Some insurance companies offer foreign language services, so you may be able to consult with them in your native language. Make sure you understand the contents of the insurance policy before you consider purchasing it.

What is Fire Insurance: Insures against various problems other than fire as well as earthquake

Fire insurance is insurance against damage to the house and furniture caused by various disasters, including fires. It is important to understand the details of this insurance, as it is often required to be purchased when renting an apartment.

What is covered by fire insurance

Although fire insurance has the name "fire," it actually covers a variety of damages other than fire. For example, it covers damage to a house caused by natural disasters such as typhoons, heavy snowfall, and lightning strikes. In addition, depending on the situation, coverage may also be provided for water leakage due to burst water pipes, flooded floors, and broken window panes caused by burglars.

However, the specific coverage depends on the insurance policy you purchase. If you limit the scope of coverage to fire and lightning, you can save on premiums. If you want more extensive coverage, you can expand the scope of coverage, although the premiums may be a little higher.

Items not covered by fire insurance

Fire insurance is a reliable insurance policy that covers a wide range of disasters, but it is important to note that there are some cases where coverage is not available.

For example, if the damage is caused primarily by the dilapidation of the building, you may not be eligible for coverage. Also, if the fire is caused by obvious carelessness, such as a fire caused by mismanagement of cigarettes or a fire caused by leaving a pot on fire and forgetting to turn it off, you may not be eligible for coverage.

Furthermore, fire insurance does not cover any damage caused by earthquakes. If you need to be prepared for earthquakes, consider purchasing earthquake insurance, which is explained in the next chapter.

Fire insurance quotes

The market rate for fire insurance varies depending on the structure of the building and the coverage, but for a reinforced concrete condominium or single-family home with coverage for fire and lightning only, the annual premium can be as low as 2,000 yen. If flood or snow damage is also included in the coverage, the annual premium is approximately ¥5,000 to ¥10,000. Because of the higher risk of fire in wooden houses, insurance premiums tend to be two to three times higher than for reinforced concrete buildings.

However, in the case of rental properties, the landlord (owner) may specify the fire insurance coverage and insurance company. This is done to ensure proper protection of the building owned by the landlord.

The designated insurance company and coverage may be more expensive than if you choose your own, but in some cases, you may be contractually obligated to join the designated insurance company. On the other hand, in some cases, even if the landlord designates an insurance company, you may be able to change to another insurance company of your own choosing.

According to our interviews with experts, "It is important to find the right balance between coverage and premiums for fire insurance. First, take into account the structure and location of your house, and sort out what coverage you need. We then recommend that you compare the products of multiple insurance companies and choose a plan that makes sense for you".

Reference:Price.com - Fire insurance for homes - comparison, quotes, simulation　

What is earthquake insurance?

Earthquake insurance is an insurance policy that covers damages to your home caused by an earthquake. Japan is an earthquake-prone country, and it is highly likely that a major earthquake will occur in the future. Therefore, it is very important to consider purchasing earthquake insurance.

However, earthquake insurance is attached as a rider to fire insurance and cannot be purchased as a stand-alone policy. The process is to purchase fire insurance and then add earthquake insurance as an option.

What Earthquake Insurance Covers

Earthquake insurance covers not only direct damage caused by earthquake tremors. Damage caused by fires and tsunamis that result from earthquakes can also be covered by earthquake insurance. Damage caused by volcanic eruptions are also covered.

The building covered by the policy is limited to the residence, and in the case of a house with a storefront, only the residential portion of the building is covered. Household goods (furniture, appliances, etc.) may be covered separately from the building.

Items not covered by earthquake insurance

Earthquake insurance coverage is limited to residences and their household goods, and does not cover buildings such as offices and offices. Also excluded from coverage are jewelry, artwork, cash, and securities.

Note that even if the house is totally destroyed in an earthquake, the remaining loan balance must be repaid separately. You may want to consider a separate insurance policy to provide for loan repayment.

Earthquake insurance quotes

Because earthquake insurance premiums are government-approved, premiums are the same regardless of which insurance company you use for the same coverage.

However, premiums vary from prefecture to prefecture, and premiums tend to be relatively high in areas with high earthquake risk, such as the Kanto and Shikoku regions.

The maximum amount of insurance coverage to be paid depends on the amount of fire insurance coverage. For buildings, the amount is equivalent to 30-50% of the fire insurance coverage amount, with an upper limit of 50 million yen. For household goods, the amount is equivalent to 30-50% of the fire insurance coverage amount, with an upper limit of 10 million yen.

According to the Disaster Prevention Information page of the Cabinet Office, it is estimated that up to 175,000 buildings could be totally destroyed in the event of an earthquake directly under the city. It is well worth considering purchasing earthquake insurance as a contingency plan.

Reference:Special Feature: Assumption of Damage and Countermeasures for an Earthquake in the Tokyo Metropolitan Area (Final Report)

Recommended insurance companies with foreign language capabilities

For foreigners who have difficulty with Japanese-language procedures, the hurdle of purchasing Japanese insurance may seem high. Therefore, we would like to recommend two insurance companies that can provide services in foreign languages to foreigners.

1. Chubb General Insurance Co.

Chubb provides insurance services in several foreign languages, including English, for foreign residents in Japan. The company's "Home Insurance" product line includes a wide range of insurance products, including extensive coverage for disasters such as fire and earthquake, allowing foreign residents to live in Japan with peace of mind against the risks of the Japanese living environment.

Chubb has established a call center exclusively for foreign customers, and has a service system that can be used with confidence in one's native language for everything from insurance consultation to accident response. The company also features a generous support system that provides an overview of insurance and policy clauses in foreign languages.

Reference:Chubb.

Mitsui Sumitomo Insurance, Aioi Nissay Dowa Insurance

Among Japan's major insurance companies, Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance are among the best in providing foreign language services.

Both companies can provide insurance consultation and procedures through interpreter operators in 14 languages, including English, Chinese, Korean, Thai, and Portuguese.

The company also features a generous support system for foreign customers, providing insurance outlines and policy clauses in foreign languages.

Reference:Launch of "14-Language Support" for Accident Response Service, etc.

These two companies offer excellent language support to help foreign nationals purchase homeowners insurance with confidence. We encourage you to consider them when purchasing insurance.

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summary

Fire insurance is the basis of Japanese home insurance, which provides coverage for various risks other than fire. In addition, earthquake insurance can be purchased as an option to ensure full earthquake preparedness.

Foreign nationals can purchase home insurance just like Japanese nationals, as long as they meet the requirements. Some insurance companies focus on foreign language support, so if you have concerns about the language aspect, we recommend that you consult with them.

A thorough understanding of the Japanese insurance system and choosing the right insurance policy for you will lead to a secure residential life. We hope this article will be helpful to foreign residents when purchasing home insurance.

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