Explanation of Home contents insurance and Fire insurance – English speaking Insurance Company (Agents) for foreigners
Post: Tuesday March 29, 2016
Here is an easy summary explaining insurance for a tenant in a lease residential property, and property insurance for owners. We have especially picked up information important to non-Japanese nationals living in Japan. You will also find information about our recommended English speaking insurance companies (agencies).
Also, in recent years, more and more people worry about compensation for damages from an earthquake. When your house suffers any damage from an earthquake, a tsunami, and a fire caused by an earthquake, it is not compensated by normal fire insurance. Here we also give guidance about general earthquake insurance.
Insurance for a person who rents a house
Insurance contracted by a tenant of a rental property
Compensation for household effects + a special agreement on Tenant's Liability, Personal Liability, etc.
A person who rents a house usually gets “Fire Insurance” in which household effects are compensated for.
You are required to have “Fire Insurance” if it is stated so in the lease agreement when you rent a residence.
This standard “Fire Insurance” policy for tenants from an insurance company is actually a set of insurance packages that include necessary coverage.
Compensation from fire insurance is applied not only when the household effects of your room suffer damages by a fire for example, but also in the following cases:
- When a child has broken a PC or a vase in the room
- When the water of a washing machine has overflown and made the floor drenched
- When a soccer ball has hit and injured somebody else by accident
An average insurance rate is about ¥17,000 - ¥22,000 for 2 years, and the price rises if there are any options added on. Because the period of a normal lease contract is 2 years, an insurance contract shall also need to be renewed at the time of renewal of a lease contract.
When you are a foreigner residing in Japan on corporate business, your company might be enrolled in “Expats Insurance”, and your household effects may already be covered under movables for daily living.
However, because standard fire insurance does not include “Earthquake Insurance”, you should reconfirm the following to be sure:
- Can you apply optionally to include it?
- Is it included in a service package of your fire insurance?
- How much can it cover for building damage and household effects?
Now, let's see how much fire insurance will actually be when you add “Earthquake Insurance”.
Example) Case of a domestic insurance company and its premium
Property: a wooden detached house in Tokyo, with 100 square meters of gross floor area, ten years old
The maximum amount of compensation for household effects to be set for ¥7,000,000.
In this case the premium for 1 year of Home contents insurance with Earthquake insurance is to be about 33,290 yen.
【Details of compensation】
- Household effects: Maximum compensation amount ¥7,000,000.-
- Tenant's Liability: Maximum compensation amount ¥15,000,000.-
- Repair Expenses: Maximum compensation amount ¥1,000,000.-
- Personal Liability: Maximum compensation amount ¥100,000,000
- Earthquake Insurance: Maximum compensation amount ¥3,500,000.-
(30-50% of the maximum compensation amount on Household effects and no more than ¥10,000,000)
Insurance for a person who owns a house
Insurance contracted by a property owner
Compensation for a building (the exclusively owned space) + a special agreement on Premises liability, compensation for rent, etc.
An individual owner of a house usually gets fire insurance for the building (the exclusively owned space in case of a condominium).
When a property is leased, fire insurance is contracted for the property building (the exclusively owned space in case of a condominium).
When a natural disaster such as an earthquake, storm or flood happens and a property you own is damaged, a large amount of repair expenses may be incurred. When a property you own suffers damage from spread of fire due to arson or an accidental fire, there may be cases in which the property is not compensated for even if you, the owner of the property, are not responsible for the damage.
If you have a lease tenant which damages the property or a third party by fault or negligence, the property owner may also be asked to get involved.
For such cases we recommend you contracting insurance for a property owner.
If a building collapses, disappears, or is washed away by an earthquake or tsunami, standard fire insurance does not cover this. Neither in case of a fire caused by earthquake. For these instances, a separate “Earthquake insurance” needs to be contracted.
The following is an example of an insurance premium and compensation amount when you contract both fire and earthquake insurance:
Example) The case of a domestic insurance company and its premium
The premium is about ¥99,690 for 1 year when we assume the case of a detached wooden house in Tokyo with 100 square meters of gross floor area.
【Details of compensation】
- Insurance for a building: ¥20,000,000.-
- Earthquake insurance for a building: ¥10,000,000.-
- Insurance for household effects: ¥10,000,000.-
- Earthquake insurance for household effects: ¥5,000,000.-
- Special agreement for miscellaneous expenses at the time of the accident: 20% of the total insured amount and no more than ¥3,000,000.- (extra expense compensation)
- Special agreement for earthquake fire expense: 5% of the total insured amount and no more than ¥3,000,000.- (extra expense compensation)
or earthquake fire expense: 5% of the total insured amount and no more than ¥3,000,000 (extra expense compensation)
In the case of a building with steel reinforced concrete (fireproof) structure, the premium becomes about ¥53,280 for one year which is about half of that with a wooden structure.
For both renting a residence or owning a property the premium of an insurance policy depends on what structure the property is, wooden or steel reinforced concrete, and how much you insure your household effects.
We recommend you select the proper insurance policy depending on the type and purpose of a property (for own use or for leasing) as well as consider the necessary details of compensation.
We also recommend English speaking Insurance Companies if you are a foreigner and understanding Japanese is difficult.
The following is a list of English speaking Insurance companies that can help from giving a quotation to various matters after compensation. They will help you feel comfortable for contracting insurance which looks difficult at a glance.
English Speaking Fire Insurance Company (Agency) in Tokyo and the suburbs
Relo Financial Solutions Ltd.
Mojumdar & Company, Limited