Car insurance

Automobile Insurance in Japan is a mix of compulsory and optional scheme.

Compulsory Liability Protection 自賠責保険

All registered road vehicles are covered under a liability protection scheme as part of the purchase price and then annual vehicle taxation. Referred to as 自賠責保険 in Japanese.

The limits are for liability in case of death or permanent disablement and/or medical treatment of injured third parties. Includes passengers of one’s own vehicle. The limits are far lower than could be incurred by a significant accident.

Additionally, no vehicle or property damage is covered under this scheme.

It is therefore reckless to operate a motor vehicle with just this bare minimum level of coverage.

Optional Automobile Insurance 車両保険

This insurance is supplemental to the compulsory liability protection. There are many options to source competitive optional insurance quotes.

Using providers with an online service the registration and payment can be conducted electronically with relative ease.

There are insurance agents offering services in English but you will pay a premium as a result. If purchasing a car from a dealer, either with cash or financed, they will be able to handle your optional insurance requirements and be able to answer any general insurance related questions. They are typically able to offer competitive terms.

Concepts related to vehicle insurance which are commonplace elsewhere are also present here in Japan.

For example, discount to premiums is offered across 20 levels.

Your first insurance contract will start on either level 6 or 7 then increase one level each year without making an insurance claim.

The highest of which, level 20, will deliver an 63% discount.

As accidents can cause a drop in level it's possible to end up lower than 6. (Levels 1,2 and 3 will result in an increase to the insurance amount. Level 1 a massive 64% increase to the insurance premium.)

Additionally, limiting the number/age of drivers or increasing the voluntary “excess” payment can also result in additional discounts. (Voluntary excess, typically 50,000yen is often increased to 100,000yen.)

Coverage will be broken into many areas including:

• Collision damage for your own car. Based on an estimated cost to replace. This is actually optional unless you have financed the car.
• Liability for yourself is typically limited to 30 million yen
• Liability for your own passengers is optional but highly recommended.
• Third party liability should be either unlimited or in the region of 200 million yen.

Other optional coverage and services are offered for such things are Road Side Assistance and use of a lawyer.

Most insurance providers will present three quotes with a range of coverage from which to chose from.

Alternatively, online aggregating quote requests are possible to compare several providers at once. (One example is kakaku.com but it's possible your ancestors will receive spam if you use this service.)

Coverage Options

Coverage Options will vary by insurance provider it is there essential to understand in detail what you are selecting. Below information is therefore indicative.

Driver Restrictions

Typically these will be split as follows. The narrower the restriction the cheaper the insurance. Note that age restrictions may also be overlayed.

1. 本人限定 - The Insured only.
2. 夫婦限定 - The Insurance and their partner. (Otherwise reflected as 配偶者.)
3. 家族限定 - Limited to family.
   1. This can be further differentiated between, (a) qualified children who co-habit with you and (b) children who do not co-habit with you but are not married.
4. 運転者限定なし - No restrictions on who can drive the car as long as you have granted them permission.

Age Restrictions

Age restrictions can be applied to further reduce the premium. Typically the cut off ages are; 21, 26, 30, 35.

Excess

A compulsory or optional excess can be applied to the terms of coverage to reduce the insurance premium. These are typically in the range of 100,000 to 150,000 yen. In the event of a claim you will need to pay the amount detailed in the excess.

Using Insurance

In the event of a fender bender it is not uncommon to ask for repair estimates before leveraging insurance as to protect your no-claims discount level or avoid paying the voluntary excess.

Even in the event of third party personal injury it's possible your insurance agent will recommend to use the Compulsory Liability Protection.

Contrary to many other nations, a verbal expression of apolgy is not considered an admission of liability. (It's Japan. You say sorry if someone stands on your foot.)

Useful Links:

http://www.japaninsurance.net/driving.html

An overview of the automobile insurance situation in Japan with advice on what to do in the event of an accident.