Car Insurance in Japan

You get to have your cake and eat it


I learned something new (and important) last week, so I want to share it with you today.

So last Monday I was involved in a minor traffic accident (thankfully not much damage and no one was hurt).

After calling (and waiting for) the police, the owner of the other car and I looked at the damage and decided it didn’t look too serious.

“Let’s get a quote and see if we can sort this out ourselves,” we said to each other.

A couple of days later the phone rang and their quote was 320,000 yen. Hmmm. I contacted my insurance company and left the matter in their hands.

And that’s where I learned my new thing: I had assumed that asking the insurance company to step in and do all the work of negotiating, deciding on responsibility and damages, and talking to the other party, repair places, etc. would in effect result in you making a claim on your insurance.

Not so.

You can ask them to do everything, and then at the last moment when the payment has been decided you can then ask them to do a simulation of how much your premiums will go up and pay the claim yourself if the numbers work in your favour.

I had no idea. Basically I should have called my insurance company immediately, I would have saved myself some time and some stress, and the end result would have been the same.

The key is to tell the insurance company when you contact them that you are thinking of paying the claim yourself depending on the cost. Then make sure they check with you before settling it, and you should be able to have your cake and eat it: have them do all the work and then avoid more expensive premiums for years if the claim is small enough (depending on your situation it may be better to pay smaller claims under 100,000 yen or so yourself, but do ask them for projections for your specific situation).

So if you are unlucky enough to be involved in an accident, call your insurance company immediately and have them go into action.

And if you drive in Japan, for the sake of everything holy, make sure you have unlimited third party cover for people and property. You might not need to insure your own car, but traffic accident claims here can get ridiculous fast. ​

Any experiences with car insurance? Any recommendations? I may be shopping for a new insurance company soon as the person in charge of my case has been pretty sloppy and her supervisor wasn’t much better…

8 Responses

    1. In the end, how much did it cost you? What did you do?
      My insurance story is this: my car was scratched in a shopping center parking lot. Called the police and they checked the cameras but couldn’t see anything. It was very far from the camera. We had insurance but because they didn’t know who did it we couldn’t claim.
      Even if we could claim it wouldn’t have been worth it apparently.

      1. That sucks, Alan. Sorry to hear.
        My story is still ongoing! There was some disagreement over whether they actually hit our car (apparently if there is no collision, the insurance companies don’t assign fault) but they found a 2cm graze that apparently corresponded to the other vehicle 🙂
        Still waiting to hear how much it is going to cost. I’ll report back once it’s all over!

  2. Hey Ben, when you and I talked over email I seem to remember you said liability insurance was not really necessary in Japan. Here I read quite the opposite, where you recommend to have liability insurance for infinite amounts.
    Is that tied to your car? Does it cover more than car accidents? (Typical example in the US are “are you covered is a kid drowns in your swimming pool”, a good other example for bloggers is “are you covered if some company decides to sue you for defamation?”)

    1. Hi SB
      Yes, this is just car insurance. Third party only is pretty reasonable.
      You are talking about umbrella liability insurance, which seems very popular in the US due to the much higher chance of expensive lawsuits.

  3. We also have accident insurance, which would cover us for accidents where we were hurt, as well as accidents where we were responsible for someone else getting hurt (example: when my motorbike fell on a kid that was playing on it… no big deal, but it was nice to have the insurance company deal with the slightly weird family).
    In Japan compensation is much less of a thing. Two examples: an American friend of mine had a bad motorbike accident (he almost lost his leg, months of surgeries, etc.) and was bitter because he only got $10,000-20,000 -in the US it would have been 100x that.
    A few years ago at my wife’s school a sign came off in high wind and struck a neighbour, cutting her leg pretty badly. We ended up getting her some fruit, the insurance company paid her hospital bill, and we gave her $600 as an apology. Again, in the US, that bill would have been hundreds of times larger.
    So in my experience people here don’t really worry about umbrella liability. If some kid drowned in your swimming pool I think it would be seen as an unfortunate accident, not an opportunity to take all your assets.
    As always, seek professional advice, etc. as I am just some guy on the internet 🙂

  4. Hello, how did everything work out? Did you switch companies?
    Im currently searching for car insurance in Japan.

    1. Unfortunately, this is a case of ‘do as I say, not as I do’ -we ended up renewing with the same company as we didn’t have/take the time to look into switching 😉