Car insurance in Japan
03 Aug 2025 | #car | #japan | #moneyWe recently bought a second-hand minivan and in this post I’ll describe what I learned about car insurance, and our experience signing up for one.
Mandatory car insurance (自賠責保険 - Jibaiseki Hoken)
All vehicles must have it, the price and coverage is set by the law (and doesn’t depend on the driver), it is renewed at shaken (vehicle inspection). As of 2025 it costs 17,650 yen for 2 years for regular cars and a bit less for kei-cars and motorcycles (source).
Multiple insurance companies offer it, but since the price and coverage is the same, it doesn’t really matter which one to choose. The car we bought still has one year until the next shaken, so this is taken care of until then.
It has some serious limitations though (source):
- Only covers the other party, not the driver or passengers of the insured vehicle
- Only covers injuries or death, but not damages to property or vehicles
- It has pretty low limits (all limits are per injured person):
- Injury: up to 1.2m yen (120万円)
- Death: up to 30m yen (3,000万円)
- Permanent disability: up to 40m yen (4,000万円)
If someone causes an accident, they will be liable for all other expenses, like damages to the other car(s) or buildings, medical expenses and death above the mandatory limits, and all costs associated with their passengers’ and their own recovery. Thus having an additional, optional insurance to cover these is highly recommended, and about 90% of drivers have one.
Optional insurance (任意保険 - Nini Hoken)
As we saw above, this is highly recommended, so when people talk about car insurance in Japan, they usually mean this. Multiple insurance companies offer packages with various coverage, so there are a lot of options here.
Major things to decide:
- who will be the main driver? - this can be different than the owner of the car, and the insurance gets cheaper if the main driver has a gold license
- who will drive the car? - main driver, main driver and spouse, anybody. The price of insurance gets higher with more people included. Since the insurance is optional, even if someone is not included, they are still allowed to drive the car, but the insurance won’t cover that trip. To counter this, one can take out a 1-day insurance (1日自動車保険) for that day, available for a few hundred yens at e.g. Lawson. So unless you know for sure that others will drive, it is likely better to limit it to the driver (and spouse).
- do you want coverage for yourself and passengers, or only the other parties? - cost of the other parties can definitely bankrupt you, but whether you want insurance to cover your own medical costs is more of a personal preference
- do you want coverage for your own car or only the others’? - one might decide to just pay for any damages out of pocket. This can save up to half the cost of insurance, so worth considering
- do you want roadside assistance? - if your car breaks down (flat tire, dead battery, out of fuel, stuck in snow, etc.), the insurance company will send someone to help you. JAF offers this as a separate service for 6,000 yen per year (or as pay-as-you-go), so that’s a good comparison.
At the end of the day insurance is a negative sum game: on average we are expected to pay more for insurance than what we will get from it (otherwise insurance companies would go bankrupt). So there is an argument for only getting coverage for catastrophic events (e.g. being on the hook to pay enormous medical costs of someone else, or the price of someone’s luxury car), while skipping insurance on the more manageable disasters (e.g. fixing your own car if you hit a utility pole).
In the end we chose the followings:
- main driver: my wife. We plan to both drive, and since she has a gold license, this saves on the insurance
- who will drive: main driver and spouse
- coverage for driver and passengers: yes (it ended up being pretty cheap (6,290 yen per year), and nice to not have to worry about it)
- coverage for our own car: we thought a lot about this, and decided to get a limited coverage for the first year (with high, 100,000 yen deductible). I expect that we will skip on this from the second year onwards
- roadside assistance: initially decided to skip and just pay for JAF if we need it (they charge 20-30,000 yen per event, so it’s not so bad), but in the end it got included for free
Dealership
The dealership one buys their car can handle the insurance for you. This is likely the easiest, but the cost will probably by higher than other options. We passed on this, and decided to do it ourselves.
Corporate discount
Because of my employer I’m eligible for a 31.5% discount at Mitsui Sumitomo’s Insurance (三井住友海上火災保険株式会社 - don’t ask me if they are the same as the SMBC bank). Going through their quick estimation website I got a ¥82,440 yearly fee for the above conditions.
Kakaku.com
価格.com is a well-known price comparison website, and they have a page for car insurance. An insurance quote has many unique inputs (age, model, milage of the car, driver details), so you won’t be able to get estimates immediately on the site, but instead need to fill out all your details (including your contact information) and then the insurance companies will e-mail and/or mail you their quotes in the next few days. The process was pretty easy, and apart from a few reminders in the first week they didn’t send me any spam, so it was fine to give them my details.
Here are the yearly fees per insurance provider that we got (ordered by fee):
| Company | Yearly fee |
|---|---|
| AXA DIRECT | ¥40,200 |
| Zurich | ¥42,770 |
| Mitsui Direct | ¥48,230 |
| SONY | ¥63,180 |
| SBI | ¥66,920 |
| E.design | ¥68,022 |
| Rakuten | ¥75,070 |
| SOMPO | ¥78,170 |
| Mitsumori (Corporate discount) | ¥82,440 |
So looks like the 35% off corporate discount ended up being the worse, however that estimate is from the insurance company’s website directly. Meanwhile the others are from the first estimate the companies sent me based on my input on kakaku.com, so the final price would likely be higher after checking their fine-print and adding extra things.
AXA DIRECT
I decided to continue with AXA DIRECT, as they were the cheapest and they had good reviews online. After signing up on their website from the email they sent me, I got to confirm the data I entered on kakaku.com (it was all there, but I could modify it if I wanted to), then I got to the coverage configuration page.
I really liked how AXA designed this page: it was separated into sections (like Compensation for the other party in an accident, Compensation for yourself and your passengers, Compensation for your own vehicle, etc.). Each section showed how much it contributed to the fee, and I could adjust any part of the coverage and have it recalculate the fee.
Moreover if anything was unclear, there was always a more details button explaining each term and coverage, and if even that wasn’t clear enough, there was a further details page giving specific examples for each line of the coverage. It was really nice to be able to drill down until we fully understood it.
In the end we made a few adjustments:
- made the medical expenses coverage unlimited for us and our passengers (only a slight increase)
- limited the coverage for our own vehicle - by excluding hit&run, hitting utility poles, hitting bicycles, and increasing our deductible to 100,000 yen. This saved us about 10,000 yen
- we added coverage for legal fees - this was based on a colleague’s recommendation, as they had a bad experience crashing with someone who didn’t have insurance and wasn’t cooperative, and then suing them is the only way forward. It added 8,263 yen to the fee
Also we learned that AXA’s base rate includes the roadside assistance service (and can’t be removed), so we are also getting that which is nice.
In the end this left us with a yearly insurance fee of 40,750 yen, which I’m pretty happy with. We will probably revisit the coverage next year, but until then this is a good deal, I think.
Once the dealer completed the paperwork for our car and sent us the 車検書 (shakensho), we input the details from that (chassis number, license plate), and finalized the insurance contract on their website. As the last step we paid by credit card (we paid the full year at once, as paying it monthly would be 10% more expensive).
The overall process was easy and clear, and this is one more reason I liked AXA. Comparing it to Mitsumori (where I had the corporate discount): while they had the easy estimate website, the next step was to call them and based on other’s experience, the call usually takes an hour.