Steve Burson, President of H&R, talks about the lesser understood car insurance system here in Japan.
Featured in the BCCJ Acumen, Mr. Burson advises in brief on car insurance and some proper preliminary steps to take before you become a full-time driver here.
In Japan, a point system is used, but it is a bit different than that of the U.S for example, which places points on your license as you accrue an accident or offense history. Japan on the other hand gives you as a driver points to work with, and in general, the higher the points, the easier it will be to get coverage, and of course the cost will be lower. As you have accidents and file claims. “Basic insurance is placed on a vehicle when it is first registered, and additional levels of insurance can then be added for extra protection”
OK, so you have basic insurance on your car (called “sha-ken”), but many don’t feel inclined to get increased coverage after that. Mr. Burson explains that this can be a problem because in Japan, unless it is very obvious and witnesses are present, the accident will never be entirely the fault of one driver, and if you are a foreign resident, this can be a difficult situation in particular if you do not have sufficient coverage. This is of course, if you are in a large accident and you have possibly totaled your vehicle. For more minor accidents, bumps and slight damage in Japan, it is best to simply not even file a claim, and both drivers involved in the accident will often opt for this option.
One more thing Mr. Burson mentions to keep in mind: The value of cars in Japan depreciate at an extraordinary rate, essentially losing all resale value after about 6 years. If you are driving an older or used car, there is probably no need to have full coverage on the car, as the raise in premiums after filing a claim would just simply not be worth fixing the car.
Ironically, the used car market in Japan is not as big as booming as one would think, despite the sharp drop in prices for still relatively new cars by international standards. Either way, you can get a great deal on used cars in Japan, and with the touchy insurance system, this could be your best option.
H&R Consultants and Lease Japan can answer all your car and insurance related questions.