Car Insurance in Japan

1. Types of Car Insurance

(1) Mandatory Insurance – Jibaiseki Hoken (じばいせきほけん)

• Every car owner in Japan must join this insurance.

• It covers only injury or death of the other person in an accident.

• It does not cover property damage (like cars or buildings) or your own injuries.

👉 Because it is very basic, you also need voluntary insurance.

(2) Voluntary Insurance – Nini Hoken (にんいほけん)

• This is extra insurance you can choose.

• It covers a much wider range: people, cars, property, and yourself.

Main coverage includes:

1. Taijin Baishō Hoken (たいじんばいしょうほけん) – Injury or death of the other person (usually unlimited)

2. Taibutsu Baishō Hoken (たいぶつばいしょうほけん) – Damage to other people’s property (car, house, etc.)

3. Jinshin Shōgai Hoken (じんしんしょうがいほけん) – Medical costs and support for you and passengers

4. Tōjōsha Shōgai Hoken (とうじょうしゃしょうがいほけん) – Compensation if passengers are injured

5. Sharyō Hoken (しゃりょうほけん) – Covers your own car (accident, theft, natural disaster, etc.)

2. How Insurance Costs Are Decided

• Your age (younger drivers pay more)

• Type of car and how you use it

• Driving history (Gold license = cheaper)

• Accident record (there is a system called Nōnfuriito Tōkyū 等級 which changes your discount)

3. Tips for Joining

• Choose unlimited coverage for taijin (対人) and taibutsu (対物)

• Always add jinshin shōgai hoken (人身傷害保険) to protect yourself and family

• For new or expensive cars, get sharyō hoken (車両保険)

• Internet insurance (netto-kei ネット系) is usually cheaper, but agency type (dairiten 代理店) offers better support

4. Taking my insurance as an example

I want to use the coverage details of my AXA Direct auto insurance policy as an example.
The annual insurance premium is ¥28,390.
The premium and coverage details are as follows:

5. About Jinshin shogai hoken(Medical costs and support for you and passengers)

1. What is Jinshin Shōgai Hoshō Tokuyaku (じんしんしょうがいほしょうとくやく)?

This is an extra coverage (special rider) in AXA Direct’s car insurance.
It gives financial support if the driver or passengers are injured or die in an accident.
It covers actual costs (じっさいのそんがい / jissai no songai) like medical fees, lost income, and more.

2. What does it cover?

1. Medical costs – Iryōhi (いりょうひ): Hospital bills, medicine, doctor’s fees.

2. Lost income – Kyūgyō Songai (きゅうぎょうそんがい): Money you lose if you cannot work.

3. Pain and suffering – Isharyō (いしゃりょう): Emotional damage or distress.

4. Future lost earnings – Isshitsu Rieki (いっしつりえき): If disability reduces your ability to work in future.

5. Severe disability – Jūdō Kōi Shōgai (じゅうどこういしょうがい): If you suffer a serious permanent injury, AXA may pay up to double the coverage (unless you chose “unlimited”).

3. When does it apply?

• When you are driving a car

• When you are a passenger in the insured car

• Sometimes also when walking, cycling, or riding a motorbike and hit by another car

👉 You can choose “Tōjō-chū nomi hoshō (とうじょうちゅうのみほしょう)” which means covered only when you are inside the insured car.

4. Coverage limits (Hoshō Gaku 保証額)

• You can choose the limit, usually between 30 million yen (3000万円) and 100 million yen (1億円), or even “Unlimited – Museigen (むせいげん)”.

• For severe permanent disability, AXA may pay up to 2× the limit (except if unlimited).

5. What is NOT covered? (Hoshō Gai 補償外)

• If the accident was intentional (Koi こい) or caused by gross negligence (Jūdaina Kashitsu じゅうだいなかしつ)

• Driving without a license (Mumenkyō unten むめんきょううんてん)

• Drunk driving (Inshu unten いんしゅうんてん) or under drugs

• Illness or health condition not caused by an accident

• Natural disasters (earthquake, tsunami, eruption)

• Car races or using the car for non-approved purposes

6. Pros and Cons

Pros

• Pays regardless of who was at fault (Kashitsu 割合 わりあい doesn’t matter much)

• You can get money quickly without waiting for settlement (Jidan 示談 じだん)

• Covers wide range: hospital, disability, pain, lost income

Cons

• Higher coverage = higher premium (Hokenryō ほけんりょう)

• “Tōjō-chū nomi (とうじょうちゅうのみ)” is cheaper but limited

• Some exclusions must be carefully checked

7. Who should add this coverage?

• People or families who drive often (commuting, trips, daily use)

• Those who also walk or cycle a lot, because accidents can happen outside the car too

• Older people or those worried about long recovery time → better to set higher limit

• Anyone who wants peace of mind but must balance cost and coverage

6. Summary

• Jibaiseki Hoken (じばいせきほけん) = Minimum, but required by law

• Nini Hoken (ににほけん) = Extra, but very important in real life

• If you don’t have proper voluntary insurance, you may face huge costs after an accident

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