Yasuaki Kobayashi / Yomiuri Shimbun Staff Writer
Earthquake insurance has attracted much attention in the aftermath of the March 11 quake and tsunami, which caused massive damage to homes and household goods.
Here are some frequently asked questions and answers about quake insurance.
Q: What is quake insurance?
A: It is special insurance for housing and household property that covers items damaged, burned or washed away as a result of earthquakes, tsunami and volcanic eruptions.
There are maximum limits for compensation, such as 50 million yen for houses and 10 million yen for household goods. Payouts vary depending on the extent of the damage.
Privately owned cars are excluded from such coverage in principle, as are precious metals and jewelry items worth more than 300,000 yen and securities.
Q: How does quake insurance work?
A: When a large quake occurs, the amount of payments required may be too large for nonlife insurance companies to cover on their own.
The central government has a special system to deal with this contingency, which can provide a maximum of 5.5 trillion yen.
The greater the damage, the higher the ratio of compensation paid by the government. Payouts related to the March 11 earthquake and tsunami are expected to be the largest in history.
Q: How can I get quake insurance?
A: Earthquake insurance can only be purchased together with fire insurance.
People should be aware that if they take out just fire insurance, it will not cover damage from quakes and tsunami.
If you already have fire insurance, you can add quake insurance even during the contract period for your fire insurance.
Q: Are the premiums for quake insurance high?
A: They vary depending on where you live or the structure of your housing.
For example, if you take out insurance that pays up to 10 million yen in benefits for a steel-frame building, you would pay 16,900 yen a year in Tokyo. People living in Miyagi and Iwate prefectures--struck hard by the March 11 disaster--would pay 6,500 yen and 5,000 yen, respectively.
If you live in an area that is considered highly prone to large quakes or very likely to suffer major damage, insurance premiums are greater.
Q: Do many people have quake insurance?
A: The number has increased steadily since the 1995 Great Hanshin Earthquake. A total of 12.27 million quake insurance contracts existed in fiscal 2009, more than twice the 5.18 million in fiscal 1995.
Some people feel the premiums are relatively high, however, so only 23 percent of households were covered by quake insurance in fiscal 2009.
Among the regions struck by the March 11 quake and tsunami, 33 percent of households in Miyagi Prefecture had quake insurance. The figure was 15 percent in Aomori Prefecture, 12 percent in Iwate Prefecture and 14 percent in Fukushima Prefecture.
(Mar. 28, 2011)
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