— The numbers say cancel. The fear in my chest says wait.
Should I cancel my earthquake insurance in Japan? Logically, yes. The payout system is harsher than most people realize, and a famous Japanese financial educator says it is not worth it. I pay about 1,073 yen a month. I know I should cancel. But I have not. This is the gap between knowing and doing, at age 67, in a country that shakes.
A financial educator says: do not buy earthquake insurance
In Japan, a well-known YouTuber and financial educator argues that earthquake insurance is mostly unnecessary. His reasoning is that it pays out far less than people expect. I read more about it on an online community he runs, where a former insurance industry employee wrote in detail.
The article said: for renters and condo owners especially, earthquake insurance is rarely a good deal. The premium is real money. The payout, if a disaster strikes, is often disappointing.
The 4 damage categories: how earthquake insurance actually pays
Most Japanese policyholders do not understand the payout structure. I did not, until I researched it. Earthquake insurance in Japan pays out based on four damage tiers:
- Total loss: 100 percent of the insured amount
- Major partial loss: 60 percent
- Minor partial loss: 30 percent
- Slight loss: 5 percent only
The most common category, by far, is the bottom one. A house that looks badly damaged from a quake often gets classified as “slight loss” and pays just 5 percent. The payout almost never matches the repair invoice.
I had been assuming that if a quake half-destroyed my house, the insurance would cover the repairs. That assumption was wrong. The system does not pay for repairs. It pays a category-based amount that may or may not be close to what you need.
But there is one real benefit
I do not want to be unfair. Earthquake insurance is not pure waste.
The most important thing it covers is damage that is “caused by” an earthquake, including fire after a quake, tsunami damage, and ground subsidence. Regular fire insurance does not cover any of these. If a quake starts a fire that burns your house, only earthquake insurance pays. So if you live in a wooden house in an area at high seismic risk, the calculation changes.
And in the catastrophic cases, total loss or major partial loss, the policy does pay meaningfully.
So why have I not cancelled?
I have looked at the math. I am 67. I have lived through plenty of small quakes. I know the probability of the worst case. I have a regular fire insurance policy too.
On paper, cancelling is rational. I would save about 12,876 yen a year. Over the rest of my life, that is real money.
But every time I sit down to fill out the cancellation form, something stops me. It is not greed for the payout. It is the picture in my head: a big earthquake, my house shaking, me standing in the rubble, thinking “I cancelled the insurance just last year.” That image has more emotional weight than the savings have.
This is the gap I want to write honestly about. The numbers are clear. The feelings are not.
What I have decided, for now
I am keeping the policy. Not because it is the right financial decision. Because at 67, I am not arguing with my fear anymore. Some 1,073 yen per month is the price of not having to imagine the worst.
If I were 35 and starting over, I would probably cancel. The math would matter more. The fear would matter less. But I am not 35. I am 67, and I am tired, and the policy gives me a small piece of quiet I can afford. So I am paying for that quiet.
That is a real reason to keep an insurance policy. Not the smartest reason. But honest.
FAQ
Is earthquake insurance in Japan worth it?
It depends. The payout system pays much less than people expect for partial damage. It is most valuable for total loss situations and for damages that fire insurance does not cover, like quake-caused fires or tsunami.
How much does earthquake insurance cost in Japan?
Premiums vary by region and building type, but a typical wooden home in a medium-risk area pays around 1,000 to 2,000 yen per month. Mine is about 1,073 yen.
What does earthquake insurance not cover?
It does not reimburse repair costs directly. It pays a fixed percentage based on a damage category. The lowest tier, “slight loss,” pays only 5 percent of the insured amount, regardless of repair invoices.
Should I cancel my earthquake insurance?
Logically, often yes. Emotionally, often no. The decision is not purely financial. If the premium is small and the peace of mind is real, keeping it is a defensible choice, even if the math says otherwise.
— Me-me
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