When you buy a car, be it brand new or used, part of the cost is made up by
mandatory insurance (強制保険料). However, this insurance does not provide full
coverage in the case of an accident. It is strongly recommended to purchase
additional, optional car insurance so that you are not hit with a huge bill
later on down the track.
This is of course easier said than done. The language barrier between foreigners
and the insurance companies is a big deterrent to obtaining this type of
insurance. It is also a relatively complicated process to wade through all the
paper work. Even Japanese people often just go with the company their car dealer
recommends without doing any research.
As many foreigners buy their cars privately, this option is not available, and
even if it were, it's not the most cost effective way to get insurance. As with
all major purchases, it's best to shop around. Prices can range from only 20,000
yen up to many hundreds of thousands, depending on the model of the car and the
age of the driver. You want to get the best deal that suits you.
Remember, it is very rare for 100% of blame to be placed on one party in the
case of an accident. Even if you think you are a great driver and you will not
cause any accidents, the people around you may. Ibaraki is well known to have
some of the most dangerous drivers in Japan.
Types of coverage
Within any insurance contract, there are a number of variables that can be
tailored to meet your needs and budget.
Bodily injury liability cover (対人賠償責任保険金額)
This insurance covers the medical expenses of other driver/s if you cause an
accident. This is an extension of your liability under the compulsory insurance.
It is best to set this variable to "unlimited" (無制限) as you will be personally
liable to pay the excess medical expenses if it goes over the set amount.
Medical expenses can be very expensive in Japan.
Property damage liability cover (対物賠償責任保険金額)
This insurance covers any damaged to public or private property. It is also a
good idea to have this set to "unlimited" as who really knows how much that
power pole or old lady's house you ran into will cost! This insurance also
covers the cost of the other cars involved in the accident, but not your own.
Passenger injury compensation cover (搭乗者傷害保険金額)
This insurance covers the medical expenses of other people in the other car
(other than the driver) at the time of an accident.
Personal injury compensation cover (人身傷害補償金額)
This insurance covers any personal medical expenses or expenses of people in
your car. If you have private medical insurance, like many JETs and English
teachers do, you do not need to pay the premium for this insurance as it should
already be covered privately. However, you should check the conditions of your
current policy to make sure it covers accidents that are your own fault. Many
medical insurance polices limit the cover in this case. You don't want to find
out too late
Physical damage cover (車両保険)
This insurance is optional. If your car is worth a lot of money, then this
insurance would be a good idea as it will cover the cost of your car being
replaced or repaired up to the agreed value. If you drive an older car, then it
may not be worth paying this premium as second hand cars are very cheap in Japan
and an agreed value for such a car may not be worth it.
