What insurance do I need for property in Japan?

Authored by the expert who managed and guided the team behind the Japan Property Pack

Everything you need to know before buying real estate is included in our Japan Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Japan. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Japanese real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Tokyo, Osaka, and Kyoto. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Do you own the property outright or are you taking out a mortgage in Japan?

Your ownership structure directly determines your insurance requirements and flexibility in Japan's property market.

If you own the property outright without a mortgage, you have complete freedom to choose your insurance coverage levels and providers. However, this doesn't mean you should skimp on protection—Japan's natural disaster risks make comprehensive coverage essential regardless of financing status.

When you finance through a Japanese mortgage, lenders typically require comprehensive building insurance as a condition of the loan. Most banks mandate fire insurance at minimum, with coverage amounts matching the outstanding loan balance. Some lenders also require earthquake insurance, especially for properties in high-risk zones like Tokyo, Kanagawa, or coastal prefectures.

Foreign buyers using overseas financing face different requirements, but Japanese property law still recommends adequate coverage. The key difference is that domestic lenders often have preferred insurance providers and may bundle policies with mortgage products, potentially offering better rates.

As of September 2025, major Japanese banks require insurance certificates before loan disbursement, and coverage must remain active throughout the mortgage term.

Is the property located in Tokyo, a coastal area, or an earthquake-prone region?

Location determines your insurance premiums and mandatory coverage requirements more than any other factor in Japan.

Tokyo properties face the highest insurance costs due to concentrated earthquake risk and high rebuild values. Basic fire insurance in Tokyo ranges from ¥15,000-¥30,000 annually for a standard condominium, with earthquake riders adding another ¥20,000-¥45,000 per year. The Tokyo Metropolitan area, including surrounding prefectures, falls under the highest risk category for seismic activity.

Coastal properties require additional flood, tsunami, and typhoon coverage beyond standard policies. Prefectures like Kanagawa, Shizuoka, and Wakayama face both earthquake and tsunami risks, driving premium costs 40-60% higher than inland areas. Typhoon season from June through October poses additional risks for coastal properties, particularly in southern regions.

Even inland areas aren't immune—Japan's entire territory sits on active tectonic plates. However, properties in central Honshu regions like Nagano or Gifu typically see 20-30% lower premiums compared to Tokyo or coastal zones.

It's something we develop in our Japan property pack.

Is the building a standalone house, a condominium unit, or an apartment rental?

Property Type	Insurance Responsibility	Typical Coverage Needed
Standalone House	Owner covers entire structure	Building, contents, liability, earthquake
Condominium Unit	Owner covers interior only	Contents, personal liability, interior improvements
Apartment Rental	Tenant covers contents only	Personal belongings, liability to landlord
Investment Property	Owner covers building/unit	Property damage, loss-of-rent, liability
Vacation Home	Owner covers entire property	Comprehensive coverage plus vacancy protection

What is the total value of the building itself in yen, and what would it cost to rebuild?

Building valuation determines your insurance coverage limits and directly affects premium calculations in Japan's property market.

New construction in Tokyo averages ¥40-¥80 million for standard single-family homes, while condominium units range from ¥30-¥120 million depending on size and location. Rebuild costs typically match or exceed purchase prices due to Japan's high construction labor costs and strict building codes implemented after major earthquakes.

Insurance companies use professional estimators to calculate rebuild values based on current construction costs per square meter. As of September 2025, construction costs in Tokyo average ¥200,000-¥350,000 per square meter for residential properties, with premium materials and earthquake-resistant features increasing costs significantly.

Older properties built before 1981 earthquake code updates may require structural assessments that affect both rebuild estimates and insurance availability. Some insurers refuse coverage for pre-1981 buildings without seismic retrofitting, while others impose higher deductibles and limited coverage amounts.

The gap between market value and rebuild cost can be substantial—a ¥50 million Tokyo condominium might cost ¥70 million to rebuild due to current construction standards. Always insure based on rebuild cost, not purchase price, to avoid underinsurance penalties during claims.

What is the estimated value of all furniture, appliances, and belongings inside the property?

Contents coverage protects your personal belongings and requires accurate valuation to avoid claim disputes.

Standard Japanese households typically maintain ¥1-¥5 million worth of contents, including furniture, electronics, clothing, and kitchen appliances. High-end properties in Tokyo or Osaka may contain ¥8-¥15 million in contents, especially when including imported furniture, expensive electronics, or valuable personal items.

Create a detailed inventory with photographs and receipts for items over ¥100,000. Japanese insurers often require proof of purchase for expensive claims, and replacement cost coverage (rather than actual cash value) ensures you can buy new items at current prices rather than depreciated values.

Certain high-value items require special riders—jewelry, artwork, or antiques over ¥500,000 per item typically need separate coverage. Electronics lose value quickly in Japan's tech-forward market, so ensure your policy covers replacement at current retail prices rather than depreciated values.

Does the property face specific risks such as earthquakes, tsunamis, typhoons, or flooding?

Japan's natural disaster profile requires specialized insurance coverage beyond standard fire policies.

Earthquake insurance is virtually mandatory given Japan's seismic activity, but it's sold as a separate rider to fire insurance rather than standalone coverage. The government-backed earthquake insurance system limits coverage to 50% of building value and 50% of contents value, with maximum payouts of ¥50 million for buildings and ¥10 million for contents.

Tsunami risk affects coastal properties within 10 kilometers of the ocean, requiring additional flood coverage. The 2011 Tohoku tsunami demonstrated that standard policies exclude tsunami damage, making separate riders essential for coastal investments. Premium increases range from 30-80% for comprehensive tsunami coverage.

Typhoon season brings flooding and wind damage risks, particularly in western and southern Japan. Flood insurance covers water damage from storms but typically excludes tsunami-related flooding. Wind damage falls under standard policies, but roof and window protection may require specific riders in typhoon-prone areas.

River flooding affects inland properties near major waterways like the Tone, Shinano, or Yodo rivers. Climate change has increased flood frequency, making flood insurance increasingly important even for traditionally safe inland areas.

Do you need liability coverage in case someone gets injured inside your property or damages a neighbor's property?

Personal liability coverage protects against third-party injury claims and property damage to neighboring units or buildings.

Japan's dense urban environment makes liability coverage particularly important, especially in condominium buildings where water leaks or fire can quickly spread to neighboring units. Standard liability coverage ranges from ¥10-¥100 million per incident, with most policies offering ¥30 million as the default amount.

Rental properties require higher liability limits due to increased exposure from tenant activities and visitor traffic. Landlord liability insurance typically costs ¥5,000-¥15,000 annually and covers incidents involving tenants, delivery personnel, or maintenance workers.

Personal liability extends beyond your property boundaries—coverage includes incidents where you accidentally damage others' property or cause injury through negligence. This protection is particularly valuable in Japan's liability-conscious society where even minor incidents can result in significant compensation claims.

It's something we develop in our Japan property pack.

Are you planning to live in the property yourself, rent it out long-term, or use it as a short-term rental?

Property usage determines specific coverage needs and affects both premium costs and policy availability.

Owner-occupied properties require standard homeowner's insurance covering building structure, contents, and personal liability. Premiums are typically lowest for owner-occupied properties since insurers view them as lower risk due to consistent maintenance and occupancy.

Long-term rental properties need landlord insurance including building coverage, landlord liability, and optional loss-of-rent protection. Premiums increase 15-25% for rental properties due to higher claim frequencies from tenant-related damages and increased liability exposure.

Short-term rental properties (Airbnb-style) face the highest insurance costs and limited coverage options. Many standard policies exclude short-term rental activities, requiring specialized hospitality or commercial coverage. These policies can cost 50-100% more than standard homeowner's insurance and may include business interruption coverage.

Vacation homes used occasionally require special consideration for vacancy periods when properties sit unattended for months. Some insurers require regular inspection visits or impose higher deductibles for claims occurring during vacancy periods.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Japan versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

If renting out, do you need loss-of-rent coverage in case tenants stop paying or the property becomes uninhabitable?

Loss-of-rent insurance provides income protection when rental properties become temporarily uninhabitable or tenants default on payments.

Standard loss-of-rent coverage typically pays 12-24 months of rental income when property damage makes units uninhabitable. This coverage costs approximately 10-15% of annual rental income and activates when covered perils like fire, earthquake, or flood force tenant evacuation during repairs.

Tenant default protection is separate from property damage coverage and protects against rental income loss from non-paying tenants. This specialized coverage costs ¥50,000-¥150,000 annually depending on rental income levels and tenant screening quality.

Japanese rental law favors tenants, making eviction proceedings lengthy and expensive. Loss-of-rent coverage helps bridge income gaps during legal proceedings and property restoration periods. Some policies include legal expense coverage for eviction proceedings and debt collection efforts.

Consider your cash flow sensitivity when determining coverage periods—properties with high mortgage payments or negative cash flow need longer coverage periods, while properties with strong positive cash flow might opt for shorter coverage to reduce premium costs.

Have you checked whether the condominium association (if applicable) already provides basic building insurance?

Condominium associations typically carry master policies covering building structure and common areas, but individual unit coverage remains the owner's responsibility.

Most Japanese condominium associations maintain fire and earthquake insurance covering the building's exterior structure, elevators, lobbies, and common facilities. However, this coverage excludes individual unit interiors, personal belongings, and improvements made by unit owners.

Review the association's insurance certificate to understand coverage limits and exclusions before purchasing individual coverage. Some associations carry minimal coverage requiring unit owners to supplement with additional building insurance, while others maintain comprehensive policies reducing individual insurance needs.

Association-level earthquake insurance often covers only partial building damage, requiring unit owners to purchase additional coverage for complete earthquake protection. The master policy may cover structural repairs but exclude unit interior restoration, temporary housing costs, or personal property replacement.

Special assessments for major building repairs can reach millions of yen per unit when association insurance proves inadequate. Consider supplemental coverage protecting against special assessment liabilities, especially in older buildings with potentially outdated insurance coverage.

Do you need additional riders such as earthquake insurance, flood coverage, or fire protection beyond the legal minimum?

Beyond basic fire insurance, several specialized riders provide essential protection for Japan's unique risk profile.

1. **Earthquake insurance riders:** Government-backed earthquake coverage typically covers only 50% of property value, making private supplemental earthquake insurance valuable for complete protection. Premium earthquake policies can provide up to 100% coverage with annual costs ranging from ¥25,000-¥60,000 for Tokyo properties.2. **Comprehensive flood coverage:** Standard policies often exclude certain types of flooding, requiring specialized riders for complete water damage protection. River flooding, storm surge, and tsunami damage each require separate coverage considerations.3. **Extended fire protection:** Basic fire insurance may exclude electrical fires, gas explosions, or fires spreading from neighboring properties. Enhanced fire riders provide broader coverage for ¥8,000-¥15,000 annually.4. **Personal property floaters:** High-value items like jewelry, artwork, or electronics over ¥500,000 require separate riders with specific coverage limits and appraisal requirements.5. **Business interruption coverage:** For rental properties or home-based businesses, this coverage compensates for income loss during property restoration periods.

It's something we develop in our Japan property pack.

How much can you realistically afford in monthly or yearly premiums, and what level of deductible makes sense for your budget?

Balancing coverage needs with budget constraints requires understanding how deductibles and premium levels affect total insurance costs and claim payouts.

Basic property insurance in Japan starts around ¥15,000-¥25,000 annually for standard condominiums, while comprehensive coverage including earthquake, flood, and liability protection ranges from ¥35,000-¥80,000 per year. Premium properties in high-risk areas like Tokyo can exceed ¥100,000 annually for complete coverage.

Higher deductibles significantly reduce premium costs—increasing your deductible from ¥50,000 to ¥200,000 typically reduces annual premiums by 20-30%. However, ensure you can afford the deductible amount in case of claims, as Japan's high repair costs mean even minor damage can exceed ¥300,000.

Consider your total property investment when setting coverage levels. Properties worth ¥50 million or more justify comprehensive coverage despite higher costs, while lower-value properties might benefit from higher deductibles and basic coverage to maintain positive cash flow.

Payment options include annual, semi-annual, or monthly premium payments, with annual payments typically offering 5-10% discounts. Some insurers provide multi-policy discounts when combining property insurance with auto or life insurance policies.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Japan Earthquake Insurance
2. Financial Services Agency Japan
3. General Insurance Association of Japan
4. Ministry of Land, Infrastructure, Transport and Tourism
5. Japan Meteorological Agency
6. National Research Institute for Earth Science and Disaster Resilience
7. Real Estate Information Network System
8. Japan Real Estate Institute