Types of car insurance in Japan

For families with young children or living in areas where traveling by train or bus is not convenient, a car is definitely an indispensable means to serve daily life as well as business. Talking about the experience of buying and selling cars in Japan, Momiji’s family has been referenced in many articles, but there are quite a few articles that mention car insurance in Japan.

So what are the contents of car insurance in Japan? How should we choose to buy an insurance package to ensure safety as well as save costs? Momiji’s Family would like to share in the article below!

1.What are the types of car insurance in Japan?

Types of car insurance in Japan


Looking at the diagram above, it can be seen that car insurance is divided into two main types: mandatory insurance and voluntary insurance. Voluntary insurance is divided into three more specific types, including: compensation insurance for the opponent, compensation insurance for car owners and occupants, and compensation insurance for car

2.What is the content and compensation coverage of each type of insurance?

2.1 Mandatory car insurance (自賠責保険- Jibaiseki hoken)

This type of insurance is mandatory to participate in when owning a car in Japan. Without this insurance, the vehicle will not be allowed to register and run on the road. In case of being caught driving a car without Jibaisekihoken mandatory insurance, the car owner will not only be fined with a suspended sentence of less than 1 year or cash of less than 50 man yen and also have 6 points deducted from the driver’s license.

In addition, this insurance must always be kept in the vehicle or carried with the driver, if the police ask and do not present it, there is also a fine of 30 man yen. Therefore, car owners need to pay special attention to whether their car is participating in this type of insurance and whether the insurance is still valid or expired.

The compensation coverage of this type of Jibaisekihoken insurance only covers personal damage to “the opponent” in the event of an accident. The maximum compensation is 4,000 man (ten thousand yen) if the opponent is injured and 3,000 man (ten thousand yen) if the opponent is killed in an accident. In addition, the insurance will not pay for physical damage such as house, car, or damaged belongings due to an accident as well as injury or damage to the car owner. All costs that the car owner will have to pay if they cause an accident without the support of other voluntary insurance packages.

This mandatory insurance will usually be registered or renewed at the place where the vehicle owner applies for the shaken (車検). Fees are set and do not vary between insurance agents.

Mandatory insurance premiums for cars and motorcycles in Japan in 2018 rates (自賠責保険料)

Source: http://jibaiseki-hoken.net/article-3/

2.2. Voluntary car insurance (任意保険- Ninihoken)

Although the name is voluntary, most car owners participate in this insurance. The reason is that if only participating in Jibaiseki hoken compulsory insurance, in the event of an accident, the car owner will have to bear the costs of his own damage as well as material damage caused to the opponent. In addition, the maximum compensation level of 4,000 man yen sounds like a lot, but there are many cases where the actual compensation for accidents is up to oku (million yen). Therefore, participating in voluntary car insurance is necessary.

Voluntary insurance is divided into three more specific types, including: compensation insurance for the opponent, compensation insurance for car owners and occupants, and compensation insurance for car.

Personal Damage Insurance for the Opponent (対人補償保険-Taijin hoshou hoken):

This is the insurance that pays for the loss of people, the missing part of the cost that the mandatory insurance Jibai sekihoken does not cover. The insured to pay the costs here is usually the opponent when causing the accident, excluding the car owner/driver and family members of the vehicle owner/driver.

Insurance for property damage to the opponent (対物賠償保険-Taibutsubaishou hoken):

This is insurance that pays for property damage (vehicle, cargo, etc.) of the opponent in an accident. Same as above, the opponent here is understood as the person who had an accident caused by the car owner/driver. Therefore, the insurance will not cover physical damage to the vehicle owner/driver and family members of the vehicle owner/driver.

Insurance when the car owner/driver causes an accident by himself (自損事故保険-Jisonjiko hoken):

This is insurance that pays the car owner/driver in case of self-injury or 100% fault of the driver. For example, the driver hit a power pole, the driver lost control and hit a vehicle traveling in the opposite lane, etc.

However, insurance will not pay if the driver is under the influence of alcohol, does not have a license or is suicidal. The maximum coverage of the insurance is 1,500 man yen in case of death or injury, and up to 100 man yen in hospital fees during the treatment of the injury.

When using this insurance, the driver will lose 3 grades in the assessment of the level of safe driving, and the cost of insurance may increase a lot later, so depending on the case, the car owner/driver will be pay on the cost their own without notifying the insurance company.

Insurance for the occupants of the car (搭乗者傷害保険‐Toujousha shougai hoken):

This is damage assistance insurance for all occupants of the vehicle in the accident, even if the driver is 100% at fault in the accident. However, this insurance does not cover 100% of the damage, but only pays a portion of the hospital fee or is limited depending on the injured body parts. For example, if you break your arm, you will pay up to 35 man, if you break your leg, you will pay up to 100 man… etc

Personal injury insurance (人身傷害補償保険-Jinshin shougai hoshouhoken):

I’m a bit stuck with words so I can’t translate it more literally and understand. In general, this is a type of insurance that covers the entire cost when there is any loss of life, “person” here includes all people present in the vehicle when the accident occurs, including the owner/driver. 

It sounds like this insurance is similar to the insurance for the occupants Toujousha shougai hoken, but that is not the case. Jinshin shougai houshou hoken insurance covers both the car owner and the owner’s family even if in another car, not their car. Moreover, if Toujousha shougaihoken insurance only pays part of the cost, Jinshin shougai houshou hoken insurance will cover the full cost of actual damage when an accident occurs.

Car insurance (車両保険‐Sharyou hoken):

This is insurance that covers damage to the owner’s vehicle in an accident. Similar to the Jisonjiko hoken insurance, using this insurance will reduce the driver’s safety rating by 3 places, so if it is not necessary, it is usually not necessary to participate in this insurance.

Normally, this insurance should only be covered if the car is high-end, expensive and has been used for about 0~5 years.

3. How to choose voluntary insurance?

According to Momiji’s family’s experience, below are the most popular and cconsidered necessary insurance packages in voluntary insurance packages:

  1. Compensation for the opponent (対人賠償保険-Taijin Baisho hoken対物賠償保険-Taibutsu baisho hoken): Choose 無制限 – Museigen level with unlimited compensation.
  2. Personal Injury Compensation Insurance (人身傷害補償保険-Jinshinshougai hoshou hoken): Choose minimum of 3000 man yen level or more. The reason is that with a limit of 3,000 man yen, it is considered to be able to cover most of the cases of injury accidents in Japan. In addition to the 3,000 man yen limit, there is also a 5000 man yen limit package and an unlimited 無制限-Museigen level, but I think it’s not necessary and of course, if you choose packages with a higher compensation limit, the premium also increases.
  3. Insurance for the occupants of the car (搭乗者傷害保険-Toujou sha shougai hoken): Many people may think that after participating in Jinshinshougai hoshouhoken injury compensation insurance, they no longer need Toujousha shougai hoshou hoken insurance, but personally Momiji’s family thinks it’s still necessary.The reason is that the procedure to apply for insurance of Jinshin shougai hoshou hoken is quite complicated and takes time to investigate by the insurance company, 

In many cases, if the reasonableness of the damage cannot be verified, it may not be covered by the insurance company. In contrast, Toujousha shougai hoken’s compensation policy is quite clear and the procedure for re-insurance is quite easy, so if the premium is not much different, I recommend you choose this insurance

  1. Compensation insurance when the other vehicle does not buy insurance (無保険車傷害保険-Muhokensha shougaihoken): This is also the package that I think is necessary because the other party is not eligible for compensation for the car owner/ the driver, the insurance company will stand to pay. According to statistics, up to 15% of cars circulating in Japan do not participate in Nini hoken voluntary insurance, so the worst case can happen, right?

Above are the packages that can be said to be the most basic, in addition, depending on the insurance budget, the owner can choose to add other special services of each insurance company. For example, when causing an accident with a broken car that cannot be run, you need to rent a tow truck to take it away, so for peace of mind, you should choose an additional package of ロードサービス (Road service) of insurance companies. When there is an accident, just call the insurance company’s switchboard, they will send the car to help and the insurance will also pay this amount.

Momiji’s family hopes that the above sharing has provided readers with the most basic knowledge about car insurance in Japan, readers can refer to the Momiji’s family’s own insurance-buying experience in the next following articles!



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