As long as you drive a car, you never know when you might get into an accident, such as an accident with another vehicle or a self-inflicted accident. Automobile insurance plays an important role in preparing for any unforeseen circumstances.
Here we will explain the importance of car insurance for foreign nationals.
This is a must-read for foreign nationals who are thinking of buying a car. Please read to the end.
Table of Contents [Hide]
- What is insurance anyway?
- What is car insurance?
- What is compulsory automobile liability insurance?
- What is voluntary insurance?
- 1. Personal liability insurance and property damage liability insurance ⇒ [Priority] Top priority
- 2. Personal injury insurance/passenger injury insurance... [Priority] High
- 3. Self-inflicted accident insurance/Uninsured motorist injury insurance... [Priority] High
- Car Insurance FAQs
- ■Compulsory automobile liability insurance
What is insurance anyway?
Simply put, insurance is a system that prepares you for various risks that occur in your daily life.
There are many risks that can occur in our daily lives, such as injuries and unforeseen accidents. Insurance is a way for people who share the same fears to pool a certain amount of money together to prepare for the worst case scenario. The purpose of insurance is to pay expenses from the pooled funds to those who have become victims, thereby reducing their burden. This time, we will focus on car insurance and explain it in detail.
What is car insurance?
This is insurance that compensates for damages caused to your body or car in an accident. Driving a car entails the expectation of various accidents.
for example,
- I hit the guardrail myself and damaged my car.
- The other person hit me from behind.
- I hit a pedestrian
There are many possible problems that can occur in a car accident.
The table below shows how many people across Japan have automobile insurance.
Automobile insurance enrollment rate by prefecture
(End of March 2021)
| Name of prefectures | Number of vehicles owned | Personal injury insurance (%) | Property damage insurance (%) | Passenger accident insurance (%) | Vehicle insurance (%) | Personal Accident Insurance (%) |
|---|---|---|---|---|---|---|
| Hokkaido | 3,780,781 | 71.5 | 72.1 | 24.1 | 48.6 | 68.1 |
| Aomori | 1,003,353 | 71.7 | 72.1 | 23.0 | 43.8 | 68.2 |
| Iwate | 1,030,341 | 65.9 | 66.1 | 19.2 | 39.5 | 62.5 |
| Miyagi | 1,706,936 | 75.2 | 75.2 | 29.5 | 45.0 | 70.8 |
| Akita | 806,363 | 62.1 | 62.3 | 16.7 | 39.8 | 59.3 |
| Yamagata | 931,496 | 66.8 | 67.0 | 19.5 | 44.1 | 63.6 |
| Fukushima | 1,656,294 | 68.4 | 68.5 | 22.7 | 42.1 | 65.2 |
| Ibaraki | 2,629,527 | 74.6 | 74.6 | 25.4 | 42.5 | 71.2 |
| Tochigi | 1,740,658 | 73.1 | 73.1 | 24.1 | 41.3 | 69.5 |
| Gunma | 1,805,410 | 72.9 | 73.0 | 27.4 | 43.6 | 69.2 |
| Saitama | 4,162,440 | 79.3 | 79.4 | 27.2 | 45.5 | 74.3 |
| Chiba | 3,686,414 | 79.7 | 79.7 | 30.2 | 49.4 | 75.2 |
| Tokyo | 4,408,196 | 78.6 | 79.0 | 28.9 | 46.0 | 71.2 |
| Kanagawa | 4,032,723 | 80.5 | 80.7 | 28.9 | 47.2 | 74.4 |
| Niigata | 1,839,402 | 71.0 | 71.3 | 21.0 | 40.0 | 66.9 |
| Toyama | 901,347 | 73.7 | 73.8 | 21.5 | 47.2 | 69.7 |
| Ishikawa | 917,004 | 74.0 | 74.0 | 23.6 | 42.8 | 69.8 |
| Fukui | 671,579 | 74.1 | 74.1 | 19.4 | 46.5 | 70.7 |
| Yamanashi | 764,245 | 65.2 | 65.2 | 22.8 | 32.8 | 61.7 |
| Nagano | 1,910,431 | 67.7 | 67.8 | 19.8 | 39.4 | 64.3 |
| Gifu | 1,688,217 | 78.8 | 78.8 | 24.5 | 58.5 | 75.5 |
| Shizuoka | 2,904,876 | 76.5 | 76.5 | 27.4 | 47.0 | 72.1 |
| Aichi | 5,313,538 | 82.3 | 82.4 | 28.1 | 59.0 | 78.1 |
| Triple | 1,526,418 | 77.8 | 77.8 | 21.9 | 51.0 | 74.0 |
| Shiga | 1,048,878 | 75.8 | 75.8 | 22.0 | 46.8 | 71.9 |
| Kyoto | 1,341,472 | 80.4 | 80.5 | 26.7 | 48.1 | 74.4 |
| Osaka | 3,800,515 | 82.8 | 83.0 | 29.7 | 51.1 | 76.5 |
| Hyogo | 3,043,551 | 79.2 | 79.3 | 29.5 | 47.1 | 74.1 |
| Nara | 836,445 | 79.5 | 79.5 | 25.5 | 46.8 | 75.6 |
| Wakayama | 757,151 | 75.0 | 75.0 | 21.8 | 38.6 | 70.4 |
| Tottori | 467,730 | 67.9 | 67.9 | 18.1 | 47.6 | 64.8 |
| Shimane | 554,872 | 59.1 | 59.1 | 15.8 | 37.8 | 55.5 |
| Okayama | 1,552,668 | 75.7 | 75.7 | 24.9 | 46.0 | 71.0 |
| Hiroshima | 1,914,664 | 77.4 | 77.5 | 24.1 | 45.4 | 71.8 |
| Yamaguchi | 1,072,072 | 73.1 | 73.1 | 22.9 | 48.2 | 68.7 |
| Tokushima | 620,227 | 74.1 | 74.0 | 24.5 | 42.9 | 70.2 |
| Kagawa | 793,250 | 76.8 | 76.8 | 21.6 | 44.5 | 72.1 |
| Ehime | 1,026,718 | 72.4 | 72.4 | 20.5 | 40.7 | 67.9 |
| Kochi | 563,703 | 61.2 | 61.1 | 17.1 | 32.9 | 57.1 |
| Fukuoka | 3,424,727 | 77.8 | 78.0 | 26.3 | 50.2 | 72.9 |
| Saga | 684,646 | 68.3 | 68.3 | 25.8 | 41.8 | 64.4 |
| Nagasaki | 956,888 | 68.2 | 68.2 | 22.2 | 39.5 | 63.7 |
| Kumamoto | 1,396,046 | 69.0 | 69.0 | 23.0 | 46.0 | 65.4 |
| Oita | 926,540 | 68.1 | 68.1 | 20.5 | 41.3 | 63.9 |
| Miyazaki | 951,096 | 61.4 | 61.4 | 21.3 | 37.4 | 57.7 |
| Kagoshima | 1,357,360 | 62.4 | 62.3 | 20.7 | 35.7 | 58.4 |
| Okinawa | 1,168,544 | 54.1 | 54.2 | 27.9 | 28.9 | 51.3 |
| Nationwide total | 82,077,752 | 75.1 | 75.3 | 25.4 | 46.2 | 70.6 |
Source: General Insurance Rating Organization, "Overview of Automobile Insurance"
The parts underlined in red are the most important insurances in car insurance, which will provide compensation if you get into an accident and the other party suffers damage.
The enrollment rate for these insurance plans exceeds 70% of the total. If you are not covered by automobile insurance in Japan and get into an accident, the compensation amount can be immeasurable.
This insurance system exists to help reduce your losses in car accidents. There are two types of car insurance: "Automobile Liability Insurance (Compulsory Automobile Liability Insurance)" and "Optional Automobile Insurance." Optional Automobile Insurance is purchased to receive compensation for the range of damages that cannot be covered by the Compulsory Automobile Liability Insurance.
If you are a foreign national purchasing and driving a car in Japan, you must take out this optional insurance.
We will explain about compulsory insurance and optional insurance.
What is compulsory automobile liability insurance?
Since Japanese law (Automobile Liability Compensation Security Act) requires all drivers to subscribe to this insurance, it is sometimes called compulsory insurance.
Compulsory automobile liability insurance does not cover injuries to the driver (the party at fault) or property damage to both automobiles.
This insurance covers only the damages incurred by the other party in an accident (including death or permanent disability).
What is voluntary insurance?
Unlike compulsory automobile liability insurance (compulsory insurance), which you are required to join, you can decide whether or not to join this insurance of your own volition.
Compulsory automobile liability insurance often does not provide sufficient physical coverage or coverage amount, which may not cover the costs in the event of an accident.
As a driver, you should take out insurance responsibly in case of an accident, and it is safe to say that voluntary insurance is necessary.
Unlike compulsory insurance, automobile insurance (voluntary insurance) involves various types of insurance and is complicated.
Although the content may vary slightly depending on the insurance company, there are seven basic insurance policies and other special provisions.
| name | Warranty details |
|---|---|
| Personal liability insurance | Insurance in the event that you cause injury or death to another person and are legally liable for damages. This applies to any amount that exceeds the amount covered by compulsory automobile liability insurance. |
| Property damage liability insurance | Insurance to cover damage caused to someone else's property and for which you are legally liable for compensation. |
| Personal Accident Insurance | Insurance for the death or injury of passengers, including the driver. The difference with passenger injury insurance is that it pays actual losses and is paid deferred. |
| Passenger Accident Insurance | Insurance for the death or injury of passengers, including the driver. The difference with personal injury insurance is that it is a fixed payment and the payment is immediate. |
| Vehicle Insurance | Insurance to cover damage to your car in an accident. |
| Self-inflicted accident insurance | Insurance for when death or injury occurs in an accident involving no other party and insurance money is not paid from compulsory automobile liability insurance or personal injury accident insurance. |
| Uninsured Motorist Accident Insurance | Insurance in case the driver or passenger dies or suffers permanent disability, but the other party in the accident does not have sufficient ability to pay. |
There are many optional insurance options available, and you may be unsure of which one to get, so we will explain them in order of priority.
1. Personal liability insurance and property damage liability insurance ⇒ [Priority] Top priority
"Bodily injury liability insurance" and "Property damage liability insurance" are the main purpose of voluntary insurance, and insurance benefits will be paid if you incur high damage liability by causing injury or death to others or damage to their property. Personal injury and property damage liability insurance is required in the following cases:
When applicable
- An office worker was killed after his car crashed into a sidewalk due to a driving error.
- He drove carelessly and crashed into someone else's car, causing damage.
2. Personal injury insurance/passenger injury insurance... [Priority] High
"Personal injury insurance" and "passenger injury insurance" are insurance that covers the driver or passengers in the event of death or injury in an accident.
It can be said that this is the second highest priority after compensation for the other party's body and property. The difference is that personal injury insurance compensates for the actual amount of damage, while passenger injury insurance pays a fixed amount regardless of the amount of damage. Consider giving priority to personal injury insurance.
Personal injury insurance and passenger injury insurance are required in the following cases:
When applicable
- I was driving and caused an accident that injured a passenger
3. Self-inflicted accident insurance/Uninsured motorist injury insurance... [Priority] High
Both "self-inflicted accident insurance" and "uninsured motorist injury insurance" provide compensation for the body rather than the car, and are handled differently by insurance companies.
In some cases, this insurance is paid from personal injury insurance or is automatically set, so the burden of the insurance premium may not be a concern compared to other insurance. One way to do this is to look for insurance companies that are automatically set. When joining, make sure that the coverage is added. Self-inflicted accident insurance and uninsured vehicle injury insurance are required in the following cases.
When applicable
- He mistook the accelerator for the brake and crashed his car into a utility pole and a guardrail.
Voluntary insurance plays an important role as compensation in the event of an accident. If you are considering car insurance for the first time, choose a car that takes into account not only the cost of purchasing the car but also the maintenance costs, including car insurance premiums. Comparing insurance companies can keep premiums low, and adding special clauses can increase the chances of obtaining sufficient compensation. It is also important to pay premiums continuously, so consider the balance between premiums and compensation.
Car Insurance FAQs
■Compulsory automobile liability insurance
Please carry out the reissue procedure. The following items will be required for reissue.
・Seal (Shachihata is not acceptable)
・Identification card (driver's Driver's License, My Number card, health insurance card, passport)
You will need it when you go through the procedure, so be sure to bring it with you.
How was it?
There are so many different types of car insurance that it can be difficult to choose.
Be sure to check with other companies carefully to see if you really need the insurance you are looking for, and make sure to sign up for the insurance that's right for you!
