Homeowners Insurance in Japan: Fire and Flood Insurance Explained

If you buy a home in Japan using financing from a Japanese bank, you will be required to get fire insurance. Fire insurance is required by lenders because the mortgage is secured by the property, and if the property is lost through fire or accident, the lender will lose their security.

The basic guide below deals specifically with fire and flood insurance for homeowners. We will cover insurance for renters in a separate post.

Fire Insurance

Fire insurance covers the actual structure and household goods that are damaged through fire, lightning strikes, or explosions.

Fire insurance does not cover damage caused by earthquakes. Earthquake insurance has to be purchased as a rider to fire insurance. For more on this, please see our separate upcoming post on earthquake insurance.

Insurance for property is separate from insurance for household goods

In most cases, fire insurance required at the time you take out a mortgage only covers the property itself, but not your household goods. You can choose to insure your household goods against fire damage, but it is not usually required by lenders.

For example, if you take out fire insurance for both your home and property it would pay for damage to a fire that starts in your own home and also damage to the outside walls of your home due to a fire that started in a neighbor’s house. It would also cover damage to a telephone, for example, that is damaged through a lightning strike or if a piece of furniture catches on fire because of a burning cigarette.

Of course, it costs more to insure your household goods in addition to the structure itself. Please see the section below on approximate costs.

Natural disasters covered by fire insurance

“Fire” insurance covers certain natural disasters, including wind disasters like typhoons, lightning strikes, and snow and hail disasters.

Other disasters covered by fire insurance

“Fire” insurance also covers damage caused by a natural gas explosion, water stains (for example, due to a burst water pipe), flying or falling objects outside the building, violent disturbances outside your home, vandalism, and theft.

Examples of things that can be covered would be water damage to a TV from flooding from the second floor of your home, a car crashing into your home, a baseball being thrown into your home and damaging a laptop, or leaking from a washing machine hose that damages the floor or wallpaper. Coverage for theft can also include a bicycle being stolen from a common area bicycle parking lot.

Insurance for water disasters like flooding

Fire insurance does not payout for damage caused by water-related natural disasters. Coverage for “water disaster” risks like flooding has to be added on to basic fire coverage, if you so choose.

Water disaster insurance covers damage caused by storms, and floods caused by heavy rains, snowmelt, storm surges, landslides, and falling rocks and debris.

Damage from tsunamis and landslides caused by earthquakes is not covered by water disaster insurance. For natural disasters deemed to be caused by earthquakes, you will need earthquake insurance, which can be added on to your fire insurance policy.

For payout for water disasters, most insurance companies require that certain minimum conditions be met, including the requirement that flooding be at least 45-centimeters above the ground or floor level and damage to property and household goods having to be at 30% or more of the replacement price.

Even though flood disasters have increased significantly in recent years, flood insurance is not required when you take out a mortgage. Flood-related disaster compensation can appreciably increase your insurance premium, so some homeowners opt out of it.

Should you get water disaster insurance?

It’s important to way the pros and cons because of the more frequent occurrences of torrential rain and landslides in the last few years. According to the Ministry of Land, about 1.23 million, or 23.1% of households in Japan live in areas where there is a risk of a landslide or flood-related disaster occurring.

When doing due diligence for your home purchase, it is a good idea to check the hazard map for the area where the property is located because this can give you an idea of the probability of flooding and landslides occurring in the area. If the property is not located in a high-risk flooding or landslide area, you may choose not to get water disaster insurance. Unfortunately, most local governments do not publish hazard maps in English. This is one reason a  qualified bilingual real estate agent can be an invaluable resource when you are buying a home in Japan.

Approximate costs for homeowners insurance

The cost of fire insurance for a residential property in Japan can vary significantly depending on the the location of the building, when it was built, and the construction method.

If you add on insurance for household goods, water disasters, and earthquakes, of course, the premium will increase.

This is a simple simulation done using Sonpo Japan’s “1 minute” insurance simulation website (in Japanese).

For this simulation, we entered the following info:

  • 70-sqm condominium unit built in 2021
  • Located in the city of Tokyo
  • Fire insurance policy coverage is for ¥12,300,000 for the property, ¥700,000 for household goods
  • Earthquake insurance coverage is for ¥615,000 for the property, ¥350,000 for household goods

The Sonpo Japan simulation estimated annual premium payments between ¥4,450 and ¥39,200.

This assumes that you pay annually for a five-year insurance policy.

In an upcoming post, we will cover earthquake insurance.

English-capable homeowners insurance companies in Japan

The following info is provided as a reference for our readers. Please contact them directly regarding their specific services.

Bilingual Agents

All of the agents who list properties on realestate.co.jp are bilingual in Japanese and English. Some agents can also handle inquiries in Traditional Chinese, Simplified Chinese, and other languages. Please click on the links below to see their listings:

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