If you’re driving in Japan, you need at least two types of insurance. Here’s how the system works and what foreigners need to know.
Japan’s Two-Layer Car Insurance System
Layer 1: Compulsory Automobile Liability Insurance (自動車損害賠償責任保険 / 自賠責)
This is mandatory — you cannot legally drive in Japan without it. Every registered vehicle must have 自賠責 (Jibaiseki) insurance.
What it covers:
- Death or bodily injury to others caused by your vehicle
- Maximum payment: ¥30 million per person for death, ¥40 million for severe disability
What it does NOT cover:
- Damage to other people’s property
- Damage to your own car
- Injury to yourself
Cost: ¥15,000–25,000 per year depending on vehicle type. Paid when you register or renew your vehicle’s shaken (vehicle inspection).
Layer 2: Voluntary Car Insurance (任意保険)
Strongly recommended. Covers the significant gaps that 自賠責 leaves.
What voluntary insurance adds:
- Property damage to third parties (e.g., you hit another car — the repair bill)
- Higher limits for bodily injury than the mandatory minimum
- Damage to your own vehicle (collision, theft, weather)
- Personal injury protection for yourself and passengers
- Roadside assistance
Why Voluntary Insurance Is Essential
The 自賠責 mandatory minimum is genuinely inadequate. Consider:
- A serious accident causing another driver’s injuries, long-term rehabilitation, and lost income can easily exceed ¥100 million
- A new car damaged in a collision can cost ¥5–10 million to repair or replace
- 自賠責 covers none of the property damage
Without voluntary insurance, one serious accident could be financially devastating.
Getting Voluntary Car Insurance as a Foreigner
Major Japanese Insurers
All major Japanese insurers (損保ジャパン, 東京海上, あいおいニッセイ同和, etc.) offer voluntary auto insurance to foreign residents.
Requirements:
- Valid driving license (Japanese license or valid IDP+home license within grace period)
- Residence Card
- Vehicle registration (車検証)
Applications and communication are typically in Japanese.
English-Language Options
- Sony損保 (Sonpo Japan Direct) — online application, some English support
- AIG Japan — international insurer, English documentation available
Your Driver’s License in Japan
International Driver’s Permit (IDP): Issued by your home country before departure. Valid in Japan for 1 year from your entry date (not the issue date). After 1 year, you must obtain a Japanese license.
License conversion (切り替え): Citizens of countries with reciprocal agreements (most Western countries, Australia, NZ, etc.) can convert their foreign license to a Japanese one at the Driving License Center (運転免許センター) with a knowledge test (typically 10 multiple-choice questions).
Countries that must take the full practical driving test: South Korea, China, Brazil, and others without reciprocal agreements.
See our driver’s license guide for foreigners.
No-Claims Discount (等級制度)
Japanese voluntary insurance uses a grade system (等級, tōkyū) from Grade 1 to Grade 20+. Higher grade = lower premium.
When you’re a new policyholder in Japan, you start at Grade 6 regardless of your driving history abroad. This means new arrivals pay higher premiums.
Tip: Some insurers will accept foreign no-claims history documentation (from your home country insurer) to start at a higher grade. Ask when getting quotes.
Approximate Premiums
New policyholder, Grade 6, standard sedan, 30s driver, comprehensive coverage:
| Coverage | Rough Annual Premium |
|---|---|
| Basic + collision + comprehensive | ¥80,000–150,000 |
| Basic + collision (no comprehensive) | ¥50,000–90,000 |
| Third-party only | ¥20,000–40,000 |
Premiums drop significantly as you accumulate claim-free years and advance through grades.
If You’re in an Accident
- Stop — do not leave the scene
- Call 110 (police) and 119 (ambulance) if needed
- Exchange information with all parties: name, address, license number, insurance details
- Do not admit liability on the spot (even if it seems your fault — let insurers determine this)
- Contact your insurance company’s claims line