Home Insurance in Japan: What Fire Cover Includes and What Earthquake Cover Does Not
Insurance is the part of a Japanese purchase that buyers hand to whoever the bank suggests, sign without reading, and then discover the shape of after something has already happened. It is worth thirty minutes of attention before settlement, because two of its rules are genuinely counterintuitive.
Fire insurance covers considerably more than fire
火災保険 (kasai hoken) is the base policy, and any lender will require it. Despite the name, a standard policy typically covers a bundle:
- fire, lightning, and explosion
- windstorm, hail, and snow damage, which matters more than people assume in snow country
- water damage from burst pipes and from a neighbour's leak
- impact damage from vehicles and falling objects
- theft and, on some plans, vandalism
What is usually optional is the one that ends up mattering most: 水災, flood and inundation cover. It is frequently dropped to lower the premium, and it is the exclusion that turns a typhoon into a personal financial event. Whether you need it is not a matter of taste. It is a matter of where the house sits.
Read the hazard map before you read the policy
Every Japanese municipality publishes a ハザードマップ showing river flooding, storm surge, landslide risk, and in coastal areas tsunami inundation depth. They are free, public, and specific to the street.
Look at it before you make an offer, not before you buy insurance. It tells you three things at once: whether you need flood cover, roughly what the premium will look like, and whether you want the house at all. Add it to the viewing checklist alongside the physical inspection.
Since 2020, flood risk disclosure has been part of the 重要事項説明, so the agent must address it. But that happens at contract stage, which is late to be discovering that the plot sits in a three-metre inundation zone.
Earthquake cover is a rider, and it does not rebuild your house
This is the part that surprises everyone.
地震保険 (jishin hoken) cannot be bought on its own. It attaches to a fire policy, and it exists because ordinary fire insurance excludes earthquake damage, including fire caused by an earthquake and tsunami damage. Without the rider, an earthquake loss is uninsured.
Two rules define what you get:
The sum insured is capped at 30 to 50 percent of your fire policy's sum insured, subject to statutory maximums for buildings and for contents. It is deliberately not full replacement cost. The scheme is government-backed and designed to help you restart, not to rebuild the house exactly as it was.
Payouts are graded, not itemised. Your loss is assessed into one of four bands, roughly total loss, major partial, minor partial, and partial damage, and each band pays a fixed percentage of the sum insured. There is no negotiation over individual repairs. This makes claims fast after a large event, which is the point, and it means the payout may not match your repair bill.
Because the scheme is national, the core terms and pricing are the same across insurers. Premiums vary by prefecture and by construction type, wooden versus non-wooden, so a wooden house in a high-risk prefecture is at the expensive end of the table.
Discounts exist and are worth claiming: buildings meeting recognised seismic grades, base-isolated buildings, and newer construction all qualify for reductions. If the property is post-1981 under the new seismic standard, make sure the insurer knows.
Older wooden houses cost more, and sometimes get refused
If you are looking at akiya or an old house, assume insurance is a real line item rather than a rounding error. Wooden construction, age, and thatched or unusual roofs all push premiums up, and some insurers decline certain risks outright. For a property that has stood empty for years, ask about cover before you commit, because "uninsurable" is a thing that happens and it also makes the property harder to sell later.
Practical points
- Policy terms are now capped at five years. The old ten-year contracts were withdrawn in late 2022. Long terms are still cheaper per year than annual renewal, so a five-year term paid up front is usually the economical choice.
- Insure the building, not the purchase price. The sum insured should reflect rebuilding cost, which on a cheap rural property is often higher than what you paid. Underinsuring to save premium defeats the purpose.
- Contents are separate. Building cover does not cover your possessions, and the earthquake rider treats contents as its own sum insured.
- You do not have to use the bank's broker. The lender requires cover to exist and to be assigned appropriately. It does not get to choose the insurer for you, and shopping the fire policy is worth doing since it also sets the base for the earthquake rider.
- Budget it properly. Fold the annual premium into your running cost calculation rather than treating it as a one-off closing cost.
The short version
Buy the fire policy, look hard at whether you need the flood option, and check the hazard map before you fall in love with the house. Add the earthquake rider unless you have a specific reason not to, and go in understanding that it pays a graded fraction rather than a rebuild. Insurance in Japan is not expensive relative to what it covers. The expensive mistake is assuming a standard policy already covers the two things that actually happen here.