Driving in Japan requires two types of car insurance. One is legally mandatory. One is optional but something you’d be foolish to skip. Here’s exactly what you need, what it costs, and how foreigners navigate the system.
Two Types of Car Insurance in Japan
1. Jibaiseki Hoken (自賠責保険) — Mandatory Insurance
Also called shakken insurance, this is legally required for every vehicle on Japanese roads. It covers bodily injury to third parties only — meaning if you injure someone in an accident, this pays for their medical bills.
What it does NOT cover:
- Damage to your own vehicle
- Damage to other vehicles or property
- Injury to yourself
- Any amount above the legal limits (¥30 million for death, ¥1.2 million for injury)
This is purchased automatically when you register a vehicle or at any post office, convenience store, or insurance company. It’s bundled into your shakken (vehicle inspection) costs.
Cost: Approximately ¥7,000–¥17,000 for 2 years depending on vehicle type.
2. Nin-i Hoken (任意保険) — Voluntary Insurance
This is what actually protects you in a real accident. Japanese drivers call this “nin-i” (voluntary) insurance, but practically speaking it’s essential. It covers:
- Property damage to other vehicles and objects
- Bodily injury beyond the mandatory limits
- Collision damage to your own vehicle (with collision coverage option)
- Personal injury to you and your passengers
- Uninsured motorist coverage
Without nin-i insurance, a serious accident could bankrupt you. Repair costs for luxury cars, guardrail damage, and third-party medical bills above the mandatory limits are your personal liability.
Major Car Insurance Companies in Japan
| Company | English available | Notes |
|---|---|---|
| Sony Sonpo (ソニー損保) | Partial | Online-first, competitive rates |
| Mitsui Direct (三井ダイレクト) | Partial | Online purchase available |
| AIG | Yes | Foreigner-friendly, English customer service |
| Zurich Japan | Yes | English support, international coverage |
| Tokio Marine (東京海上) | Japanese | Large traditional insurer |
| Sompo Japan | Japanese | Large traditional insurer |
For foreigners, AIG and Zurich Japan are often the most accessible because of English-language support.
Can Foreigners Get Car Insurance in Japan?
Yes, but with some conditions:
- You need a valid Japanese driver’s license or an International Driving Permit (IDP) from a country covered by the Geneva Convention
- Your residence card is required for registration
- Some insurers may ask for your driving history from your home country
Important: An International Driving Permit is valid for 1 year in Japan. After that, you must convert your foreign license to a Japanese license to continue driving legally.
Driving History (No-Claim Discount)
Japanese car insurance uses a no-claim discount system (等級制度, tōkyū seido). New drivers start at Grade 6. Each claim-free year moves you up a grade, improving your discount. Grades go from 1 to 20.
Transferring foreign driving history: Some insurers allow you to transfer overseas claim-free years. Ask specifically — it can significantly reduce your first-year premium.
How Much Does Car Insurance Cost?
| Coverage type | Approximate annual cost |
|---|---|
| Mandatory only (jibaiseki) | ¥7,000–¥17,000 (2 years) |
| Voluntary — basic | ¥30,000–¥80,000/year |
| Voluntary — full coverage | ¥80,000–¥150,000+/year |
Factors that affect price:
- Age (young drivers pay more)
- Grade/claim history
- Vehicle type and value
- Annual mileage
- Coverage options (collision, rental car, roadside assistance)
Buying Insurance in English
AIG Japan is the most commonly recommended insurer for English-speaking foreigners. Their website and customer service operate in English.
Zurich Japan also has English support and is competitive for international coverage (useful if you drive back to your home country).
For Japanese-only insurers, get help from a Japanese-speaking friend or your company’s HR department.
Travel insurance tip: If you travel outside Japan, your Japanese health insurance won’t cover you. SafetyWing is a popular choice for expats — affordable monthly plan, covers you worldwide.