My rental agent is telling me that I “have to” pay fire insurance for 2 years in advance with specific company, even though we only plan to stay for one year.
He’s telling me that this is not optional and that I have to go with this company and cannot find another insurance company.
I understand that this is common in Japan… but I have three questions.
1. Is it really COMPULSORY? Or do I have the right to not pay it?
2. Can they really insist that I go with a particular (and in this case very expensive) company? Or can I shop around?
3. Do I really have to pay for two years even though I don’t plan to stay for two years (the agent has said that standard contracts are all two years but that the company USUALLY – not always – refunds the excess if you leave early)
Would appreciate if anyone knows about this – very new to Japan so just want to know where I stand on this (not trying to dodge paying if this is normal, just want to check that it is!)
6 comments
Perfectly normal.
1. Yes, fire insurance is compulsory everywhere in Japan.
2. Yes. The building owner / management company can insist that you use a certain insurance company. In fact, I have moved 4 times so far and each time I had to use a company chosen by the owner. They can also insist on you using a certain utilities company as well.
3. Standard real estate contracts are for 2 years, so, again, yes. You might want to have a clause added to the contract to the effect of making sure you get money back if you move out early, though.
Yes compulsory. I wasn’t able to move into my current place without paying for it first.
You will get a refund if you break your lease. If you move out of Japan you probably can’t collect on it but if you fill out the paper work you will get the unused portion back in cash.
The last place I was told you can shop around but you have to prove to the management company you have same level of coverage. Which means you have to get the coverage of the preferred provider then go to a competitor and get a custom quote for something similar and then bring that back to management company back for approval. Basically I was looking at a day of non sense insurance paperwork and phone calls with no cost saving assurances. I just payed the 50,000 yen or whatever it was and focused on shopping around for a cheaper moving company
Just to clarify a few points from other posters, while fire insurance is de facto compulsory, it’s not legally compulsory. You don’t have to get fire insurance if you, say, build your own home. It’d be shockingly negligent not to, but you’re not required to have it.
But of course, most rental companies and corporations will have it in their leasing contracts that you will need fire insurance, and it’s very much their right to enforce that stipulation to leasees. So *technically* you can go out and find an apartment that will rent out a room without mandatory fire insurance, but realistically you won’t be able to because those apartments don’t exist.
Now as for *which* fire insurance company to use, they all cost about the same so most just use the companies recommended by the apartment management company because, well, why bother with the hassle? As long as the rate they’re giving you is between 2-4万 for a two year lease that’s pretty much the going rate if you went to a third party.
But then, if you still insist on using your own company for insurance that’s your right. As long as the lease you signed didn’t stipulate a certain company to be used, you should be allowed to use a third party option if you think they have better coverage or are more cost effective. Then the onus would be on you to meet with the apartment’s management company and do all the paper work and get to the okays necessary for it. And with a day or two of missed work and travel costs to do that, maybe just going with the default recommendation would probably be the right choice to begin with.
May be a silly question but what this fire insurance cover?
What they call “fire insurance” in Japan is really a general home insurance. It’s very similar to “rental insurance” when renting a condo/apartment in other countries.
It covers not only fire but most types of accidental damages, e.g., water damage if your washing machine leaks.
Typically it also covers theft, and also provides liability protection. E.g., if the furniture delivery person enters your place and gets injured because you accidentally tripped them, the insurance should provide coverage.
Is it compulsory? Landlords may insist that you have this type of insurance . Otherwise they can and will refuse to rent to you. So yeah you don’t have to get fire insurance, but the landlord isn’t obligated to rent to you.