Earthquake insurance in Japan
If you own real estate in Japan, you may with to obtain optional earthquake insurance to provide some coverage against earthquake damage. Earthquake insurance payouts from the 2011 Tohoku disaster totalled 1.3 trillion Yen. Not only were homes lost or damaged from the shaking, but fires and the devastating tsunami caused significant damage.
If you are a property owner, the main type of insurance is fire insurance. However, ordinary fire insurance does not provide coverage against tsunamis or fires caused by an earthquake. For coverage against earthquakes, a property owner must obtain an additional earthquake insurance policy on top of their fire insurance.
Earthquake insurance premiums are generally the same regardless of the insurance company. Fees will vary, however, depending on the type of construction, size of the property, and where the property is located, as some areas have been assigned higher risk levels than others.Read more
Earthquake insurance premiums to rise 15.5%
Earthquake insurance premiums on households are expected to rise by an average of 15.5% from July 2014. The reason for the increase is due to the growing risk of another major earthquake. Also, the insurance industry saw a surge in payouts following the Tohoku earthquake which has drained the reserve fund.
The average annual premium on a concrete or steel-framed residence with 10 million Yen coverage in Tokyo would increase from 16,900 Yen to 20,200 Yen. In disaster-hit areas in Iwate and Fukushima Prefectures, premiums may rise by as much as 30%. Meanwhile, some areas such as Yamagata Prefecture may see premiums fall.Read more
No. of new earthquake insurance policies up 7.3%
According to the Non-Life Insurance Rating Organization of Japan (NLIRO), the number of new earthquake insurance policies in 2011 increased by 7.3% from the year before to 9,335,873 policies.
In addition, the number of contracts on residential properties in force at the end of the 2011 fiscal year had risen by 10.5% to 14,088,665. This is the highest growth rate seen since 1996 when it increased by 15.3%. In Fukushima Prefecture, the rate increased by 51.3%. Incidentally, Fukushima previously had a low proportion of property owners with earthquake insurance. Miyagi Prefecture had the second highest increase of 30.1%, and Iwate Prefecture was third with a 23.7% increase.Read more