Car Insurance in Japan: Costs, Rules, and What Expats Should Watch Out For

Navigating car insurance in Japan can be challenging, especially for expats unfamiliar with local regulations. Japan has strict insurance requirements, and failing to comply can result in fines or even deportation.

Whether you're a foreign resident planning to drive or just curious about Japan’s auto insurance system, this guide covers everything you need to know — from mandatory coverage to cost-saving tips and common pitfalls for expats.

1. Types of Car Insurance in Japan

a) Mandatory Insurance (Jibaiseki Hoken)

Required by law for all vehicles.
Covers injuries/death to third parties (not property damage).
Minimum coverage:
- ¥1.2 million per injured person
- ¥30 million per accident
- ¥3 million per fatality

b) Voluntary Insurance (Nini Hoken)

Optional but highly recommended (covers what Jibaiseki doesn’t).
Common add-ons:
- Collision damage (repairs to your car)
- Property damage liability (other vehicles, buildings)
- Theft & fire coverage
- Personal injury protection (for you and passengers)

Insurance Type	What It Covers	Who Needs It?
Jibaiseki (Mandatory)	Third-party injuries	All drivers
Collision (Voluntary)	Your car’s repairs	New/expensive cars
Comprehensive (Voluntary)	Theft, natural disasters	High-risk areas

2. How Much Does Car Insurance Cost in Japan?

a) Average Premiums

¥30,000 – ¥100,000/year (varies by coverage, age, and driving history)
Expats often pay 20-30% more due to limited Japanese driving records

b) Factors Affecting Costs

Age & driving experience (under 25 = higher premiums)
Car type (sports cars cost more to insure)
Location (Tokyo/Osaka = higher risk = higher rates)
No-claim discounts (up to 60% off after claim-free years)

c) Ways to Save on Insurance

Choose a smaller, safer car (keijidosha/light vehicles = lower rates)
Increase your deductible (reduces premiums but raises out-of-pocket costs)
Bundle policies (some insurers offer discounts for multiple vehicles)

3. Key Rules for Driving in Japan

a) License Requirements

International Driving Permit (IDP) – Valid for 1 year (must follow Geneva Convention rules)
Japanese Driver’s License – Required for long-term residents (convert from IDP or take a test)

b) Compulsory Inspections (Shaken)

Every 2 years for standard cars
Costs ¥100,000+ (includes weight tax, insurance, and inspection fees)

c) Traffic Violations & Penalties

Speeding fines: ¥9,000 – ¥35,000
Driving without insurance: Up to 1 year in prison or ¥500,000 fine

4. Special Considerations for Expats

a) Language Barriers

Many insurers don’t offer English support — use a broker if needed
Key terms to know:
- Jibaiseki (強制保険) = Mandatory insurance
- Nini Hoken (任意保険) = Voluntary insurance
- Shaken (車検) = Vehicle inspection

b) Limited Driving History Recognition

Some insurers won’t honor foreign no-claims records
Workaround: Get a letter of experience from your previous insurer

c) Expat-Friendly Insurance Providers

Company	Why It’s Good for Expats
AIOI Nissay Dowa	English support, online claims
Sompo Japan	Offers policies in multiple languages
Tokio Marine	Flexible plans for foreign drivers

5. What to Do in Case of an Accident

a) Immediate Steps

Stop & check for injuries (call 119 for ambulance)
Contact police (110) — required for insurance claims
Exchange info (license, insurance, contact details)

b) Filing a Claim

Notify insurer within 24 hours
Submit police report & photos for faster processing

c) Common Mistakes to Avoid

Admitting fault (let insurers determine liability)
Skipping the police report (invalidates most claims)
Delaying repairs (some insurers require quick inspections)

6. Future Trends in Japan’s Car Insurance Market

a) Usage-Based Insurance (UBI)

Pay-as-you-drive policies via telematics (e.g., Toyota’s T-Connect)
Safe drivers save up to 30% on premiums

b) AI & Fraud Detection

AI analyzes claims to detect scams (saving insurers ¥20 billion/year)

c) EV & Autonomous Vehicle Coverage

New policies for electric/hybrid cars and self-driving tech

Is Japanese Car Insurance Worth It?

Driving in Japan without proper insurance is risky and illegal. While mandatory Jibaiseki is cheap, voluntary coverage is essential for full protection — especially for expats.