Guide
Earthquake insurance in Japan: coverage, payouts and legal limits
A home can suffer fire damage caused by an earthquake even though standard fire insurance generally does not cover earthquake-caused fire damage. Japan addresses that gap through a separate, nationally supported system whose insured amounts and payment categories are limited by statute.
Published 22 September 2026 · Checked against Japanese primary sources on 22 September 2026
Written by SHINWA CREATIVE, K.K., a welding and metalwork company in Miyagi Prefecture.
Fire insurance leaves an earthquake gap
Japan distinguishes kasai hoken (火災保険, fire insurance) from jishin hoken (地震保険, earthquake insurance). The Ministry of Finance states that fire insurance does not indemnify fire damage caused by an earthquake or fire that spreads because of one. The visible result can be fire, but the cause still controls which system responds.
Earthquake insurance covers fire, destruction, burial or washing away caused directly or indirectly by an earthquake, volcanic eruption or a tsunami following either event. It is not a stand-alone replacement for fire insurance. It is attached to an eligible fire insurance contract and answers a narrower set of catastrophe causes.
What the Act calls earthquake insurance
Article 2(2) of the Act on Earthquake Insurance gives four conditions. The insured property must be a residential-use building or movable property used for daily living. The covered damage must fall within the earthquake, eruption and tsunami causes described above. The contract must be attached to a specified non-life insurance contract. Its insured amount must sit within the statutory percentage and ceiling.
The two property categories are kyoju-yo tatemono (居住の用に供する建物, residential-use building) and seikatsu-yo dosan (生活用動産, household goods or movables used in daily life). Building coverage and household-goods coverage remain separate. Coverage for one category does not determine the insured amount or loss classification for the other.
The Ministry lists non-residential factories and offices outside the system. It also lists automobiles, currency, securities, and precious metals, jewels or antiques valued above ¥300,000 per item or set among the excluded property. The scheme is directed at stabilizing household life rather than replacing commercial property or every asset after a disaster.
The insured amount is 30–50% of fire coverage
Article 2(2)(iv) sets earthquake coverage between 30% and 50% of the insured amount under the attached fire insurance contract. Article 2 of the Enforcement Order then caps the earthquake insured amount at ¥50 million for a residential building and ¥10 million for household goods. Earlier earthquake contracts on the same property are counted against those ceilings.
Those figures are not estimates of reconstruction cost, market price or the amount payable for a particular event. They define the maximum insured amount inside this national scheme. The recognized loss category supplies a second limit when damage occurs.
Four loss categories set the payment percentage
The current system uses four categories for contracts commenced on or after 1 January 2017. A loss is classified first; the stated percentage is then applied to the earthquake insured amount, subject to the market-value limits in the official system. It is not a table that reimburses each repair invoice.
| Japanese term | Reference translation | Percentage of earthquake insured amount |
|---|---|---|
| zenson (全損) | Total loss | 100% |
| daihanson (大半損) | Large half loss | 60% |
| shohanson (小半損) | Small half loss | 30% |
| ichibuson (一部損) | Partial loss | 5% |
Older contracts begun on or before 2016 use the earlier total-loss, half-loss and partial-loss presentation. The start date of the contract therefore matters when reading an older policy or an official table.
Buildings and household goods use different thresholds
A residential building is tested mainly by damage to shuyo kozobu (主要構造部, major structural parts) as a percentage of the building's market value immediately before the loss. Burned or washed-away floor area provides an alternative route for the first three categories.
| Building category | Major-structural-part damage | Burned or washed-away floor area |
|---|---|---|
| Total loss | 50% or more | 70% or more |
| Large half loss | 40% to under 50% | 50% to under 70% |
| Small half loss | 20% to under 40% | 20% to under 50% |
| Partial loss | 3% to under 20% | No general floor-area band in Article 1(1)(iv) |
The table gives the basic thresholds in Article 1(1). Paragraph 4 also treats a residential building as a total loss when an imminent danger from a landslide or another disaster caused directly or indirectly by the earthquake event makes it uninhabitable. Paragraph 5 treats specified above-floor flooding or equivalent damage as a partial loss when the building does not otherwise enter one of the four categories.
Household goods instead use the damaged amount as a percentage of the goods' market value: 80% or more for total loss, 60% to under 80% for large half loss, 30% to under 60% for small half loss and 10% to under 30% for partial loss. The same payment rates of 100%, 60%, 30% and 5% apply, but the damage thresholds differ.
A 50% ratio illustrates the distinction. For major structural parts of a building it reaches the total-loss threshold. For household goods it sits in the small-half-loss band. Neither result can be inferred from a repair estimate without the assessment required by the system.
Four limits are easy to misread
The Ministry identifies several cases in which claims are not paid. Four points are especially easy to describe too broadly:
- The 30–50% rule limits the earthquake insured amount; it is not the loss-category payment percentage.
- The 10-day rule concerns damage arising after the stated period following the earthquake. It is not described by the Ministry as a ten-day deadline for submitting every claim.
- Loss or theft during an earthquake is excluded; physical earthquake damage to insured household goods is a different category.
- Intentional damage, gross negligence, legal violations, war and insurrection appear among the stated exclusions, but this page does not apply them to any event.
Seventy-two hours can count as one event
Article 3(4) of the Act treats two or more earthquakes or related events occurring within 72 hours as one event. An exception applies when the affected areas do not overlap at all. The rule helps determine how reinsurance and the system-wide payout limit apply; it does not say that every earthquake anywhere in Japan during the same three days is automatically combined.
The national system has a ¥12 trillion limit
Japan supports the system through public-private saihoken (再保険, reinsurance). Private insurers write the consumer contracts, while government reinsurance supports catastrophe liability that could exceed private capacity. The current combined payout limit for one event is ¥12 trillion.
Article 4 of the Act addresses the extreme case in which the total amount otherwise payable exceeds the combined private and government limit. Article 4 of the Order uses a proportional formula: the available combined amount is divided by the total otherwise payable, and that ratio is applied to each contract's calculated payment. The ¥12 trillion figure is therefore an aggregate system limit, not an unlimited guarantee attached to each policy.
The reinsurance layers changed on 2 April 2026
The latest allocation took effect on 2 April 2026. The General Insurance Association's current English table divides liability into three layers:
| Aggregate layer | Private insurers | Government |
|---|---|---|
| Up to ¥219.9 billion | 100% | 0% |
| Above ¥219.9 billion to ¥576.9 billion | 50% of this layer | 50% of this layer |
| Above ¥576.9 billion to ¥12 trillion | 0.41% of this layer | 99.59% of this layer |
The 2026 revision changed how government and private insurers share catastrophe liability behind the consumer contract. It did not replace the consumer loss percentages of 100%, 60%, 30% and 5%. Mixing those two sets of percentages produces a false description of an individual payout.
Structure, location and four discounts affect premiums
The Ministry states that the premium reflects the structure and location of the insured building. For household-goods coverage, the relevant structure and location are those of the building containing the goods. The official framework also identifies four discounts; they cannot be stacked.
| Discount route | Published rate |
|---|---|
| Seismic-isolated building | 50% |
| Earthquake-resistance class 3 / 2 / 1 | 50% / 30% / 10% |
| Earthquake-resistance diagnosis | 10% |
| Construction age | 10% |
Eligibility depends on the required classification and documents. The table is not an individual quote and does not establish what evidence any insurer will accept. It also does not make a statement about the safety, condition or value of a building. The separate guide to Japan's earthquake-related building standards explains why a date alone is not a building assessment.
Nationality and tax deductions are separate questions
Article 2's statutory definition lists property, causes, attachment and insured-amount conditions. It does not state a nationality or immigration-status condition. That narrow observation does not mean that an insurer must accept every application. This review did not examine company underwriting, address, payment, language or non-resident administration requirements.
The income-tax deduction uses a different and narrower test. The National Tax Agency says the relevant property is a house owned by the taxpayer, a spouse or another relative sharing the same livelihood and used regularly as that person's residence, or household goods ordinarily needed for daily life. A tax-deduction condition is not an additional sentence in Article 2's insurance definition. Conversely, the existence of an earthquake policy does not establish a deduction. This page does not calculate or advise on tax.
Neither policy is generally compulsory by statute
The General Insurance Association's English fact book states that neither fire insurance nor residential earthquake insurance is compulsory in Japan. The Act defines qualifying earthquake insurance and creates government reinsurance; it does not impose a general purchase duty on every owner, tenant or resident.
Fire insurance remains a contractual prerequisite for attaching earthquake insurance. That prerequisite is different from a nationwide legal mandate. A lender, landlord or other private contract may raise a separate contractual question, which this article has not investigated.
What this page does not decide
This review did not examine any insurer's policy wording, policy amendments (endorsements), underwriting rules, premium quote, assessment record or claim file. It did not verify whether a non-resident application is accepted, whether a mixed-use building qualifies, whether a condominium association insures common parts, or whether a particular certificate earns a discount. Those questions depend on documents and facts outside the statutes read here.
The statutory purpose is to promote earthquake insurance and help stabilize the lives of people affected by earthquake disasters. That purpose explains the residential focus, the attachment to fire insurance, the 30–50% range, standardized loss classes and government reinsurance. The scheme supplies nationally supported livelihood protection; it does not promise complete financial restoration after every event.
Sources
- Act on Earthquake Insurance (地震保険に関する法律) — Arts. 1–5Read through e-Gov API version 2 with asof=2026-09-22, revision 341AC0000000073_20200401_429AC0000000045. Article 2 defines the covered property, causes, attachment and 30–50% amount; Articles 3 and 4 provide the 72-hour and aggregate-reduction rules.
- Order for Enforcement of the Act on Earthquake Insurance (地震保険に関する法律施行令) — Arts. 1–4Read through e-Gov API version 2 with asof=2026-09-22, revision 341CO0000000164_20260402_508CO0000000113. Articles 1 and 2 give the loss thresholds, payment percentages and absolute insured-amount limits. Articles 3 and 4 contain the current reinsurance layers and proportional reduction formula.
- Ministry of Finance — Outline of Japan’s Earthquake Insurance SystemRead on 22 September 2026. The English overview separates fire and earthquake causes, describes covered and excluded property, explains current loss classes, premiums and discounts, and states the ¥12 trillion system limit.
- General Insurance Association of Japan — Insurance-related lawsRead on 22 September 2026. The page identifies the 2 April 2026 public-private liability-sharing layers and the role of the Act on Earthquake Insurance.
- General Insurance Association of Japan — Fact Book 2022–2023, residential earthquake insuranceRead on 22 September 2026. Page 24 states that neither fire nor residential earthquake insurance is compulsory and explains the attachment and standardized loss-category system. Its older reinsurance allocation figures are not used here.
- National Tax Agency — No. 1146, contracts eligible for the earthquake-insurance premium deductionCurrent as of 1 April 2026 and read on 22 September 2026. The income-tax deduction uses a residence-and-ownership test that is narrower than Article 2 of the insurance Act; this page does not calculate or advise on the deduction.
The controlling legislation is published in Japanese. English explanations from the Ministry of Finance and the General Insurance Association improve accessibility, but the Japanese statutory text governs. No court decisions or individual policy terms were reviewed.
We sincerely appreciate the time spent reading this primary-source guide. Careful separation of fire and earthquake causes can prevent a costly misunderstanding before documents are signed.