Taking out insurance on your home in Japan is optional, although if you are borrowing to finance your purchase the bank may require the borrower to take out both fire and life insurance. In 2009, 46.5% of households in Japan had fire insurance, while 23% had the additional earthquake insurance.
Types of property insurance available:
- Fire insurance
- Earthquake insurance
- Landlord insurance*
If you are buying an apartment, the insurance you take out will only cover your apartment. The building’s common areas fall under the responsibility of the owners association, which is made up of all apartment owners. When doing your due diligence, it is essential to check whether the the association has taken out fire and earthquake insurance on the common areas (elevators, hallways, lobby, car parking etc). Some buildings may just have fire insurance and not earthquake insurance, while others may not be insured at all.
Earthquake insurance can only be obtained in a set with fire insurance. The average annual premium based on 10 million Yen coverage in Tokyo is 31,300 for a wooden-frame building and 16,900 Yen for other construction (eg. reinforced concrete), but premiums are set to increase in 2015. Discounts on premiums may be available if the building is built to the latest earthquake-resistant standards. More detailed information here.
*If you are a landlord, you can also take out insurance to protect from any financial loss caused by the death of a tenant in one of your properties. Stigmatized properties may be difficult to rent out, causing the landlord a loss in income.
The information contained on this page is intended as a guide only. Buyers are advised to contact an insurance company for accurate information.