In Japan, car insurance is taken very seriously! Various services are offered by insurance companies, but there is mandatory insurance. If a person refuses to take out this insurance, it is classified as a crime. Everyone who owns a vehicle must pay liability insurance against damages and compensation for automobiles (Jidousha Songai Baishou Sekinin Hoken or Jibaiseki).
Insurance companies offer several options from the mandatory to the more comprehensive. There are insurances that only cover physical damages, others only material damages, and still others that cover both physical and material damages. Let’s look at more details about why the Japanese value car insurance so much.
Car insurance is precisely for mitigating losses in case of unforeseen events. The insurance payment is made when the license (shaken) needs to be renewed. But it is only used in cases of injuries (or death) caused to third parties and does not cover material damages. Car insurance is divided into 4 types: insurance against physical damages and third parties, insurance against material damages and third parties, insurance for physical damages, and insurance to cover the car itself.
Table of Contents
Mandatory car insurance (Jibaiseki hoken)
In Japan, there is mandatory car insurance. The mandatory insurance (Jibaiseki hoken) is meant to protect the vehicle owner in case of accidents. Every person who has a car must take this insurance as it is required by law. This insurance provides assistance for personal damages (and sometimes does not cover all expenses), and does not cover material damages. This applies to physical damages to third parties.
The cost of mandatory insurance is 30,800 yen for passenger vehicles and must be paid every 2 years. The payment registration of the insurance must be kept with the car documents; otherwise, the driver is fined 300,000 yen. And if the person has not even taken out the insurance, they will be punished with one year in prison, community service, and a fine of 500,000 yen.
The compensation paid by the mandatory insurance is on average 1.2 million yen, this amount applies in case of injuries, if the person is unable to work for days due to the accident. In case of death, it is 30 million, and for severe sequelae, it is 40 million.
Optional vehicle insurance (Nin’i hoken)
If the vehicle owner wants to take out insurance to also cover material damages, they must pay for another insurance to complement the mandatory one. Remembering that the mandatory insurance is still not sufficient, but doing this is optional. There is the Nin’i Hoken, which only covers material and physical damages to third parties, meaning it does not include the owner’s own losses. Insurance companies offer various coverage plans, even with unlimited amounts.
For insurance against material damages to third parties, the average amount is 10 million yen, the amount only changes for luxury cars. A good option is to add an optional coverage, the Taibutsu Tyoka Tokuyaku, used when the other person’s car is already quite old and not worth the cost of repair, but still, the person wants to fix it.
Most comprehensive car insurance (Sharyou Hoken)
The Sharyou Hoken covers both third-party damages and the owner’s own losses. Some plans offer coverage for theft and natural disasters. It is worth paying extra for additional insurance since the Jibaiseki is quite limited.
Other types include Taijin Baishou Hoken (insurance for third parties), Taibutsu Baishou Hoken (insurance for material damages), Jison Jiko Hoken (insurance for damages to oneself), Mu-Hokensha Shougai Hoken (insurance for third-party cars that do not have insurance), and Tojo-sha Hoken (insurance for passengers).
Compensation
To receive compensation, several factors are taken into consideration. In case of death, the calculation is made based on the salaries the victim would have received if they worked until old age, in Japan the average age is 70 years. This calculation also includes retirement. Since the amount is very high, if the person does not have optional insurance, they will have to work for a long time just to pay the compensation.
Licensing and inspections (Shaken)
According to the Toyokawa City portal, in Japan, both licensing and inspection are mandatory. For new cars after a period of 3 years, they must undergo the procedure. After that, it must be done every 2 years. Also, before the licensing deadline expires and after the new licensing.
The renewal of the validity of the licensing and inspection of automobiles can be carried out from 1 month before expiration. If the driver does not carry out the Shaken process, they may be imprisoned for 6 months. Alternatively, they can pay a fine of around 300,000 yen. Additionally, the driver’s license will incur 6 points due to the infraction. And the work permit will also be suspended.
If the vehicle is transferred or sold, the legalization procedures must be passed to the new owner of the vehicle. In case of theft of a common vehicle, a notification must be made to the Police. Then the car owner must go to the Higashi Mikawa Kenzei Jimusho and bring the document “Tonan Higai Todoke Juri Shomeisho” (notification certificate of theft occurrence) issued by the Police and their personal seal (Inkan).
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