Category: Insurance

Insurance

Will car insurance premiums be cheaper? We’ll reveal all the secret tips to save on your premiums!
Automobile insurance premiums are set based on various factors such as the driver’s age, vehicle type, annual mileage, and purpose of use of the car. Therefore, even if the age is the same, if the vehicle type and annual mileage are different, the premiums will be different for each policyholder.

Since insurance premiums are paid continuously every year, many people would like to reduce their premiums if possible. It is important to understand the points that can reduce premiums, review the insurance contents, and change the contract contents.

Now, we will introduce some tips to save on insurance premiums, so please use this as an opportunity to reconsider your car insurance.

Optional car insurance premiums vary

Auto insurance rates are determined based on a variety of conditions and factors, so premiums can vary greatly depending on the individual and insurance company.

Let’s take a look at what conditions and factors are involved.

1. Driver age requirements

If the driver is young, they are considered to have little driving experience and therefore have immature driving skills, so the insurance premiums are set higher. Conversely, the premiums are lower as the driver gets older. There are four main types of coverage:
- Coverage for those aged 21 and over
- Coverage for those aged 26 and over
- Coverage for those aged 36 and over
- All ages coverage
Age classifications vary slightly depending on the insurance company, and some insurance companies provide coverage for people over 30 years old.

2. Driver’s Scope

If the driver is limited to the policyholder only, the risk of traffic accidents is reduced, so the premiums will be lower. On the other hand, if the driver and spouse are the only insured, the premiums will be slightly higher, and if family members such as children or grandparents have the opportunity to drive, the premiums will be the highest.

3. Car model

Insurance premiums vary greatly depending on the size and performance of the car. Insurance premium determination standards called model-specific interest rate classes are set based on the accident records of each model of car. Based on this standard, “sports cars” that are at higher risk of traffic accidents and “luxury cars” that are more likely to be stolen generally have higher insurance premiums.

4. Driving history

The color and grade of your driver’s license reflect your traffic accident and violation history, and your driving history also affects your insurance premiums. If you don’t use your insurance because you have no accidents, your grade will go up and your insurance discount rate will also increase.

5. Purpose of use

The more frequently you use your car, the higher the risk of a traffic accident, and therefore the higher your insurance premiums will be. The most expensive insurance premiums are for business use, followed by commuting to work or school, and the cheapest for daily use or leisure.

6. Mileage

If you drive a long distance per year, you will also use your car for a long time and frequently, which increases the risk of traffic accidents and therefore increases your insurance premiums. Conversely, if you drive a short distance, your insurance premiums will be lower.

How to lower car insurance premiums?

As long as you continue to use your car, you never know when you might get into a traffic accident. Therefore, as long as you own and use a car, you will need to continue to have car insurance to prepare for the worst case scenario.

If you are going to be paying insurance premiums for many years, you probably want to keep them as low as possible. Insurance premiums vary depending on various conditions and factors.

In order to reduce your insurance premiums, it is important to review each of the conditions and coverages. Also, there may be some coverages that were fine when you first signed the contract, but that you no longer need as time goes by.

If your lifestyle or family structure changes and you no longer need certain items, you may be able to find more advantageous conditions or compensation.

How to reduce car insurance premiums: 1. How to sign a contract

Depending on the method of contracting, automobile insurance can be divided into “agency-type insurance” and “online shopping-type insurance.”

Agency-type insurance

This method involves visiting an insurance agency, receiving a face-to-face explanation of the insurance contents from a staff member, and signing a contract. This has the advantage of being reassuring as you can consult with them about which insurance and compensation to choose, and the procedure is easy and smooth.

Online insurance

You can apply online or over the phone, and then complete the contract procedure by mail, etc. You have to research and choose an insurance company yourself, but the appeal is that you can do the procedure easily at any time.

Looking at the premiums alone, agency-based insurance is somewhat more expensive because it incurs labor costs and storefront fees, which are added to the premiums. On the other hand, online-based insurance has the advantage that there are no fees because the procedures can be completed online.

How to reduce car insurance premiums ② Driver restrictions

When taking out car insurance, you can limit the scope of drivers of the insured vehicle.

By limiting the driver to the policyholder, the risk of a traffic accident will be reduced, making the insurance premium cheaper. If only the policyholder drives, limit the policy to the policyholder. In that case, when going out with your family, be careful not to let anyone other than the policyholder drive.

If your spouse absolutely needs to drive, you can take out one-day car insurance, and there will be no problem even if it is limited to yourself.

However, if your child gets a driver’s license and will be sharing your car, it’s safer to keep it restricted to family use just in case.

How to reduce your car insurance premiums 3. Types of vehicle insurance

You can also reduce your insurance premiums by limiting your vehicle insurance coverage to the bare minimum.

What is vehicle insurance?

This insurance covers repair costs when your vehicle is damaged.

In the first place, you can freely choose whether or not to add vehicle insurance. For example, if your car is many years old, you can choose not to repair minor scratches and wait until you can buy a new car.

Also, some people may consider buying a new car if their car is destroyed. In this case, vehicle insurance is not necessary, so you don’t need to buy it!

However, some people prefer to drive new cars even if it means having to repair them in the event of an accident, so in that case it is safer to have the system installed.

The premiums for vehicle insurance vary depending on the scope of coverage. There are limited types that only cover damage caused by traffic accidents, as well as wide types that cover damage caused by theft and natural disasters such as typhoons and earthquakes.

If we break it down even more, the coverage varies depending on the insurance company, including types of traffic accidents excluding hit-and-run and single-vehicle accidents.

The best way to save money is to not purchase vehicle insurance, but you can also reduce your premiums by carefully selecting the minimum coverage required.

How to reduce your car insurance premiums #4: Vehicle insurance deductible

In addition to the coverage of your vehicle insurance, your deductible is also a key factor in keeping your premiums down.

What is the deductible amount?

This is the amount that the policyholder pays out of pocket when receiving compensation from the insurance company in the event of an accident.

For example, if a covered accident costs 300,000 yen to repair, and your deductible is set at 50,000 yen, you will receive 250,000 yen in insurance payments and will have to pay the remaining 50,000 yen out of pocket.

By increasing this deductible, you can reduce your insurance premiums.

Let’s take an example from an insurance company.

If the deductible is zero

The insurance premiums will be the highest.

In the case of “Exemption 5-10”

The deductible for the first accident is 50,000 yen, and for the second accident it is 100,000 yen.

In the case of “Exemption 10-10”

The deductible for both the first and second accidents is 100,000 yen.

In the case of “Exemption 15-15”

This option offers the lowest insurance premiums, but the deductible for both the first and second accidents is 150,000 yen.

If the deductible is too high, the amount you have to pay in the event of an accident will increase, so it is recommended that you set it at a small amount rather than zero.

How to reduce your car insurance premiums: 5. Minimize passenger compensation

There are two main types of car insurance that cover damages to passengers in a car: “Personal Injury Insurance” and “Passenger Injury Insurance.”

Personal injury insurance and passenger injury insurance have different systems for the timing and amount of insurance payments.

If a passenger is injured in an accident, personal injury insurance will compensate the actual cost of medical treatment, etc. Furthermore, if the total amount of damages is determined, the insurance money will be paid even before a settlement is reached.

On the other hand, passenger injury insurance determines the amount of insurance coverage according to the part of the body injured and the symptoms. Insurance benefits are paid when the total number of days of hospitalization or outpatient treatment based on a doctor’s diagnosis exceeds five days.

If you have some savings and are not in a hurry to pay for medical expenses, you can rest assured by purchasing personal injury insurance that will cover the actual expenses. On the other hand, if you want to use the insurance money for medical expenses as soon as possible, you can also choose to purchase passenger injury insurance.

In any case, if you purchase both personal injury insurance and passenger insurance, the coverage will overlap, which will increase your insurance premium burden.

Carefully researching the coverage and choosing insurance that covers what you need can help you save on insurance premiums.

How to reduce car insurance premiums ⑥ Pay attention to the purpose of use

Keep in mind that insurance premiums will vary depending on how you use your car.

If the purpose of use is commuting to work or school, the premiums will be slightly higher. On the other hand, if the purpose of use is daily use or leisure, the premiums will be slightly lower.

If you use your car for commuting to work or school on average 15 days or more per month per year, it will be considered for commuting to work or school purposes.

If you usually commute by train and only drive when the weather is bad, such as when it’s raining or snowing, then your commute is infrequent and falls into the category of daily/leisure purposes.

Also, if your lifestyle has changed, such as you used to drive to work but now commute by train, or you quit your job and no longer commute to work, please ask your insurance company to change the purpose of use. Your insurance premium may go down, so we recommend you review your policy!

How to reduce your car insurance premiums ⑦ Use discount systems

Different insurance companies offer different discount systems, but let’s start by looking at the long-term premium discount.

What is the long-term discount?

This is a discount that allows you to maintain a contract with the same insurance company for a long period of time and have no accidents for many years or have an accident for which you do not use insurance, and therefore your grade will increase and your insurance premiums will become cheaper.

Regarding grades, the maximum grade is usually 20, but some insurance companies have up to 22. The higher the grade, the larger the discount rate, so the lower the insurance premium.

One of the benefits is that even if you use your insurance in the event of an accident, your grade will not decrease more gradually, so your insurance premiums are unlikely to increase.

Plus, there are other discounts:
- “Internet discount” – lower your insurance premiums if you complete your insurance contract online
- If you drive less than the set annual mileage in a year, you can have the amount of your insurance premiums carried over to the following year deducted from the amount you did not drive.
- “New car discount” – if the insurance start date is within 49 months of the new car registration, the premium will be discounted
- “Automatic brake discount” for cars equipped with safety devices such as automatic brakes
How to reduce your car insurance premiums: 8. Cancel unnecessary clauses

In addition to the basic coverage, special clauses can be added to car insurance. Contractors are free to decide whether or not to add them.

There are several types of optional clauses that are meant to provide more comprehensive coverage. For example, there are the following four:
- “Attorney Fee Special Clause” covers the costs of consulting with an attorney and having them take action in cases such as traffic accident compensation settlements and lawsuits.
- “Family Bike Special Clause” that covers damages in the event of an accident while driving a moped
- Automobile insurance is generally a one-year contract, but there is an “automatic renewal special clause” that will automatically renew your policy even if you forget to renew your policy.
- “Personal Liability Special Clause” covers compensation for injuries or death of others or damage to other people’s property in daily life
If you add all the special clauses, you will have peace of mind in the event of an emergency, but if you add too many, the insurance premium will be higher. Therefore, you can reduce your insurance premium by reviewing the special clauses and considering whether they are necessary for your life and removing the ones you do not need.

How to reduce your car insurance premiums #9 Pay your premiums annually

The cost of insurance will vary depending on the payment method and frequency of payment.

Generally, car insurance is a one-year contract, and you can pay the full amount in advance once a year (annual payment method). On the other hand, you can also split the yearly premium into 12 months and pay each month.

However, the total amount of insurance premiums will be higher if you pay monthly than if you pay annually! Therefore, you will need a large amount of money at the beginning, but we recommend paying annually because it will keep your premiums lower and you only have to pay once a year.

There are also several ways to pay your insurance premiums, including direct debit, credit card payment, convenience store payment, and bank transfer.

If you choose a payment method such as bank transfer, you may have to pay a fee. In that case, you may end up losing money by paying the fee just for the insurance premium.

On the other hand, paying by credit card also has the advantage of giving you points that can be used for shopping, etc.

It’s time to reconsider your payment methods and switch to more cost-effective methods.

Compare insurance companies

There are many insurance companies for car insurance, and each company has different coverage, discount services, and premiums. In order to receive generous coverage at the lowest possible premium, we recommend that you research the coverage details of the insurance company in detail.

When doing so, choose an insurance company that matches your current lifestyle. Look online for insurance companies with low premiums and compare the coverage.

You should also take advantage of discounts whenever possible and carefully examine the contents of your insurance to make it cheaper and give you peace of mind in the event of an accident. It is also important not to leave your insurance as it is, but to review your insurance from time to time!

If you own more than one car, you can use the second car discount.

If your family owns one car and you purchase a second car and take out car insurance, you may be eligible for a “second car discount.”

What is a second car discount?

Normally, new insurance applications start at grade 6, but under this discount system you can start from grade 7, which means you get a higher discount on your insurance premiums and lower costs.

For example, if a child gets a driver’s license after graduating from high school, buys a car, and applies for new car insurance, the premiums will be high because the child is young and has little driving experience. However, if the child’s driving grade has increased by even one grade at the time the insurance starts, the premiums will be lower.

There are several conditions that must be met in order for the second car discount to apply:
- The first vehicle is rated 11 or above and is a privately owned vehicle of 8 models.
- The second car is a new member, and there are eight types of personal vehicles.
You need to check as all the conditions must be met.

Since insurance companies do not provide any information about second car discounts, you will have to apply for them yourself to have the discount applied.

Taking advantage of the no-accident discount for parents can lower your insurance premiums

If a family purchases a new second car, they can switch the insurance rates for the first and second cars when taking out car insurance.

In order to transfer the grade of your first car to your second car, there are conditions, such as having relatives living in the same household, so be sure to check.

For example, let’s say a parent owns a car, has had no accidents for many years, and has a high insurance grade. When a child next purchases a car and applies for car insurance, even with the second car discount, they will start at grade 7. If the parent’s grade is high, switching will save a lot on the child’s insurance premium.

For your parent’s generation, the insurance premium will not be that high even if you reach grade 7. You can only change grades when joining a new policy, and once the insurance period for your second vehicle has started, you can’t do so, so don’t miss the opportunity.

Even if the second car discount is not applied, it may be possible to change your grade, so if you take advantage of this, your insurance premiums may be slightly cheaper.

Do not overlap coverage between two insurance policies

Be careful, as there may be overlapping coverage between the first and second car insurance, especially if the policyholders are related.

The most common types of insurance are “Personal Injury Insurance” and “Passenger Injury Insurance,” which cover damages to passengers in a car. These two types of insurance cover “the driver and his/her spouse,” “relatives living with the driver or spouse,” and “unmarried children living separately.”

Therefore, if a parent has personal injury insurance on their first car insurance, when their child takes out car insurance for a second car, the compensation for personal injury insurance will overlap, so they will not need to take out personal injury insurance on the second car insurance, and the premiums will be cheaper.

You can also save money on your car insurance by checking the coverage of your car insurance to avoid paying duplicate premiums unnecessarily.

You may be able to get a discount by consolidating your insurance with one company.

The second car discount applies whether the first and second cars have different insurance companies or the same, as long as certain conditions are met, such as the first car’s class.

However, you may be able to get a discount on your insurance premiums if you insure your second vehicle with the same insurance company as your first vehicle. Having one insurance company is convenient in that you also have the same contact information.

If you renew your contracts at the same time, the process will be easier. If you use one company, it will be easier to apply for a second contract, so it’s a great deal.

If you don’t drive your car often, one-day car insurance is also effective.

If you don’t drive your car often, for example, just a few times a month and only drive it around town, then if you take out car insurance that assumes you drive your car on a daily basis, the premiums will seem high for how often you use your car.

You want to take out car insurance just in case, but it would be a waste of money. In that case, there is car insurance that you can take out for just one day, so you can take out the insurance as needed and avoid waste.

1DAY Insurance, which can be purchased for just a few hundred yen a day, can be easily applied for at a convenience store. It is a convenient insurance that can be used when you don’t own a car and you borrow a friend’s or acquaintance’s car to drive.

By taking out car insurance only when you need it and for the period you need it, you can kill two birds with one stone by not only having peace of mind in the unlikely event of a traffic accident, but also keeping your insurance premiums low.

Add a family bike special clause to your motorcycle insurance

If a family member owns a moped and uses it for commuting to work, etc., they will need to take out insurance in case of a traffic accident.

Normally it would be thought that it would be a good idea to take out motorcycle insurance, but if your family owns a car, it is said to be more cost-effective to add a “family motorcycle special clause” to your car insurance.

What is the Family Bike Special Clause?

This is a special clause that covers damages if you injure or kill someone in a traffic accident or damage property while driving a moped.

The scope of coverage includes the driver, spouse, and family members living with either driver. If parents add a special clause to their car insurance, they can rest assured that their child will be covered in the event of an accident while driving a moped.

If you have life insurance, the amount of compensation will be reduced

Just as people who own and use a car have auto insurance, many people also have life insurance to protect against illness, injury, etc. You may think that life insurance has nothing to do with car insurance, but that’s not necessarily the case.

For example, if a family member is injured in a traffic accident, depending on the type of life insurance, medical expenses may be covered. Also, if the insurance company provides a sufficient death benefit in the unfortunate event of death, your family may not be left in financial difficulty.

In that case, you may not need to pay as much for personal injury insurance or passenger injury insurance in your car insurance. You should also review the coverage of your life insurance and make sure that it does not overlap with the coverage of your car insurance.

Reassess your car insurance

Automobile insurance premiums are determined based on various conditions such as the driver’s age, range, mileage, driving history, etc. It is possible to reduce insurance premiums with some ingenuity, so it is important to carefully review your premiums while keeping in mind the key points.

If you review your policy carefully, you should be able to see if there is any duplication of coverage or if there are any unnecessary special clauses attached. Especially when the renewal date approaches, you will receive postcards from the insurance company notifying you of the renewal, so it is a good chance to review your policy.

It is often the case that the premiums can be reduced by reviewing your insurance. If a long time has passed since you signed a new contract, it may be better to change the contents of your insurance due to changes in your lifestyle.

Buying a second car is also a good opportunity to reassess your options. Furthermore, if you are buying a new car, you may be able to take advantage of new discounts, such as discounts for new safety features.

It may be a bit of a hassle, but even if it’s a small amount, if you keep paying it over a long period of time, it can add up to a considerable amount, so it’s worth reconsidering.

summary

①Automobile insurance premiums are determined based on various conditions such as the driver’s age and driving history.

②To reduce insurance premiums, it is important to choose annual payments for mail-order insurance and keep coverage to a minimum.

③The range of drivers and taking advantage of discount systems are also key points for saving on insurance premiums.

④If you own two or more cars, you can reduce your insurance premiums by taking advantage of second car discounts or transferring your insurance grade.

⑤ Review the insurance coverage and compare insurance companies to choose the best insurance.
May 28, 2025
What types of car insurance are there? Introducing compulsory insurance and optional insurance

When you own a car, it is essential to have insurance. If you do not have insurance, you will have to pay a large amount of repair costs yourself if you get into an accident. However, there are many types of insurance, so you may have had trouble deciding which one is best.

This article explains the different types of car insurance. In addition, it also explains special clauses that will give you more comprehensive coverage, so it’s a great reference for anyone wanting to review their current insurance.

Understand the differences and types of compulsory and voluntary insurance

First, let’s understand the different types of car insurance and their differences, because the coverage and subject matter vary greatly depending on the type of insurance.

In particular, many people who have just gotten their driver’s license may not know what insurance they need, or may have little knowledge about insurance. Use the information below to learn more about car insurance.

There are two main types of car insurance:

There are two types of automobile insurance: “compulsory insurance” and “optional insurance.” The coverage and mandatory participation differ for each type.

Compulsory automobile liability insurance is an insurance that all car owners must purchase, and it only covers bodily injury damages. On the other hand, voluntary insurance is not a legal requirement, but it is characterized by its ability to cover a wider range of risks, such as property damage damages and compensation for the driver himself. Understand the difference between the two and choose the insurance that is right for you.

Here we explain these insurances in more detail.

Compulsory automobile liability insurance (mandatory insurance)

Compulsory automobile liability insurance is a type of insurance that all car owners are required to have. This insurance covers only bodily injury damages and aims to provide relief to victims of accidents.

However, the scope of compensation is limited and does not cover property damage, injuries to the driver, damage to the vehicle, etc. Therefore, the current situation is that many people cannot receive sufficient compensation with compulsory automobile liability insurance alone and therefore take out additional voluntary insurance.

Voluntary Insurance

Voluntary insurance is insurance that you can take out to cover high compensation amounts that cannot be covered by compulsory insurance, or to deal with a wide range of risks. Unlike compulsory insurance, this insurance is optional.

The insurance does not only cover bodily injury and property damage, but also various other types of compensation such as vehicle insurance and passenger injury insurance. By joining, you can significantly reduce the financial burden in the event of an accident, so many car owners also join voluntary insurance.

Benefits of joining optional insurance

Many people take out voluntary insurance because compulsory insurance alone does not provide sufficient compensation, but what are the benefits of voluntary insurance?

In fact, voluntary insurance has the advantage of being able to leave the response in the event of an accident to a third party, and has compensation that can handle a wide range of risks. In addition, there are special clauses that can handle troubles when you are not driving, so you can own a car with more peace of mind.

Here are three main benefits you can get by taking out optional insurance:

Accident response is entrusted to you

If you sign up for voluntary insurance, in the unlikely event of an accident, the insurance company will investigate the situation and negotiate with the other party on your behalf, leading to a smooth resolution. Since you do not have to negotiate a settlement yourself, the mental burden will also be reduced.

In particular, in the case of serious or complex accidents such as chain reactions, specialist knowledge is required, so support from an insurance company is a major benefit.

Able to handle a wide range of risks

One of the benefits of voluntary insurance is that it covers things that compulsory insurance cannot. Compulsory insurance only covers bodily injury, but voluntary insurance can cover a wide range of damages, including property damage, personal injuries, and vehicle damage.

For example, if you cause damage to someone else’s car or property, or if your car is badly damaged in an accident, you can use your insurance to cover the cost of repairs, helping you avoid unexpected, costly expenses.

We can also help with issues that occur while driving

Another benefit of voluntary insurance is that it offers special clauses that can handle accidents and troubles that occur even when you are not driving. For example, you can prepare for a variety of situations, such as being involved in an accident while walking or having your car damaged while parked.

In other words, if you sign up for voluntary insurance, you will receive support for problems related to your car in your daily life. For this reason, many people sign up for voluntary insurance because they feel that the coverage provided by compulsory insurance alone is insufficient.

When deciding which optional insurance to take out, consider your driving style and the risks involved, and choose the appropriate coverage.

There are two main types of voluntary car insurance

There are two main types of voluntary automobile insurance: “agency-based automobile insurance” and “direct automobile insurance.” If you understand the characteristics of each, you will be able to choose the insurance that suits you.

Here we will explain in detail about agency-based car insurance and direct car insurance.

①Agency-based automobile insurance

Agency-type car insurance is car insurance that is contracted through an insurance company’s agency. You can feel secure because the person in charge will directly consult with you and explain the coverage details before signing the contract.

If you are involved in an accident, the response is smooth, and the staff will guide you through the procedures and how to respond, as well as provide assistance with settlement negotiations, providing extensive support.

Even if you don’t know how to choose insurance, a person with specialized knowledge will suggest the best plan for you, so even those with little knowledge can join with peace of mind. Therefore, it is recommended for those who want thorough support or are unsure about choosing insurance.

However, since agency-type automobile insurance incurs labor and operating costs, premiums are often set higher than direct-type insurance.

②Direct car insurance

Direct car insurance is car insurance that can be purchased directly via the internet or telephone. By purchasing insurance via the internet or telephone, sales costs can be reduced and premiums can be kept low.

Since the procedure can be completed online, it is perfect for those who want speed. In addition, the insurance coverage can be freely customized, so you can choose the coverage you need.

You can easily compare plans online, so consider plans from multiple insurance companies and choose the insurance that offers the best value for your money.

However, accidents are generally handled through call centers and online services, so it is not suitable for people who prefer face-to-face support. Also, you have to decide on the details of your compensation yourself, so you will need to have some knowledge about insurance.

Voluntary insurance to compensate the other party

We have explained that automobile insurance is divided into compulsory insurance and optional insurance. Among them, optional insurance includes “personal injury insurance” and “property damage insurance” that compensate for damage to the other party in the event of an accident.

These are important insurances that compensate for damages that cannot be covered by compulsory automobile liability insurance alone. Let’s take a look at what they specifically include.

Personal injury insurance

This insurance covers any damages that exceed the compensation limit of compulsory automobile liability insurance when you injure a pedestrian or passenger in an accident. Therefore, it is essential to prepare for accidents and fatal accidents.

For example, if a fatal accident occurs, a large amount of compensation may be claimed. Since there is a maximum limit for compulsory automobile liability insurance, any amount exceeding that limit will be covered by third-party liability insurance.

It also covers medical expenses and permanent disability, providing appropriate compensation to victims.

In addition, if a settlement negotiation service is included, the insurance company will negotiate with the victim on your behalf, preventing any trouble from occurring.

Property damage insurance

Property damage insurance is insurance that compensates for damage to the other party’s car or building in an accident. It also covers repair costs and loss of business, so be sure to set a sufficient amount of compensation in preparation for expensive damages.

For example, if your car crashes into a store or factory, you may have to pay damages due to business interruption in addition to repair costs. Since there are cases where a large amount of compensation is required, we recommend choosing unlimited property damage compensation.

In addition, damage to traffic lights or guardrails is also covered. In such cases, there is a possibility that local governments or companies will claim for damages, so if you join, you will be able to receive generous compensation.

Voluntary insurance to cover yourself and your passengers

Compulsory insurance is further divided into insurance that provides compensation for yourself, your passengers, and your vehicle in the event of an accident.

From here on, we will explain the main types of optional insurance.

Personal Accident Insurance

Personal injury insurance is insurance that pays for injuries sustained by you or your passengers when you are involved in an accident. This insurance covers you regardless of the cause of the accident, even if you are negligent.

The benefit is that it covers not only the car itself, but also medical expenses, hospitalization costs, and loss of business caused by an accident.

In particular, even if the other party is negligent, you can receive compensation within the scope of the insurance amount regardless of your degree of negligence, which can reduce the burden incurred as a result of the accident. For example, if you suffer minor injuries in a vehicle collision, you can receive the necessary compensation from your own insurance before receiving compensation from the other party’s insurance.

This insurance is important in case of an accident, so it is worth considering taking out.

Passenger Accident Insurance

Passenger injury insurance provides compensation for injuries to all people in a vehicle at the time of an accident.

For example, if a driver has an accident and a family member or friend who was in the car with them is injured, passenger injury insurance will cover the medical expenses of the family member or friend and loss of work.

The attractive point of this insurance is that it reduces the mental burden on all passengers in the car and provides quick support. This insurance is essential if there is a possibility that people who are vulnerable to the effects of an accident, such as children or the elderly, are in the car.

Self-inflicted accident insurance

Self-inflicted accident insurance is insurance that provides compensation even if you do not collide with another vehicle. For example, it applies to accidents that you cause yourself, such as hitting a guardrail or utility pole while driving, or hitting an obstacle on the road.

This type of insurance does not cover damage to other vehicles or people, but only covers damage to yourself.

Even if the accident is due to your negligence, it can be said to be effective in covering the risk of causing an accident while driving, as it will cover vehicle repair costs, medical expenses, and in some cases loss of business.

It is especially recommended in cases where there are many single-vehicle accidents or if you are not confident in your driving, as it provides peace of mind.

Uninsured Motorist Accident Insurance

Uninsured motorist injury insurance applies when the other party does not have third-party liability insurance or does not provide sufficient compensation.

This insurance comes in handy when the other party in an accident is uninsured or when the compensation is insufficient due to a large percentage of fault. In particular, as accidents involving uninsured vehicles are increasing, this insurance is essential to avoid the risk of not receiving sufficient compensation.

By purchasing this insurance, you can receive appropriate compensation for damages suffered by yourself and your passengers, even if the other party does not pay sufficient compensation after an accident. It is a valuable ally, especially when driving in urban areas or crowded places, as it reduces the risk of collision with an uninsured vehicle.

Voluntary insurance to cover car

If you are looking for optional insurance that will cover your car, you should sign up for “vehicle insurance.”

Vehicle insurance is a voluntary insurance that covers damage to your vehicle caused by accidents, theft, and natural disasters, and you can choose a plan based on the scope of coverage. It covers repair costs in the event of an accident or theft, reducing your financial burden.

General vehicle insurance also covers repair costs after an accident and damage caused by natural disasters such as typhoons and snow.

In addition, the total loss vehicle special policy will cover the cost of purchasing a new car and the residual value if your vehicle is completely damaged and cannot be repaired.

As such, there is optional car insurance available, so choose a plan that suits your driving environment and risks in case of an accident.

Special clauses that provide even more generous compensation

In addition to the basic coverage of optional insurance, you can add special provisions to customize your insurance to better suit your needs.

Special clauses are used to strengthen basic coverage, and can range from enhancing coverage to limiting the scope of coverage to reducing insurance premiums. Adding special clauses can greatly increase your sense of security.

Here we will explain three special clauses that will provide you with more comprehensive compensation.

Attorney’s Fees Special Clause

The attorney’s fees special clause is a special clause that covers the attorney’s fees required when negotiating a settlement or litigating in a case of a hit-and-run accident.

For example, if you are involved in a hit-and-run accident and have difficulty negotiating with the perpetrator or making arrangements with an insurance company, this will cover the cost of hiring a lawyer.

In addition, if you have any problems with claiming after an accident or if you need to adjust the degree of fault, you can get the help of a lawyer, which will make negotiations go more smoothly. We recommend adding this special clause, especially if negotiations with the other party are complicated.

Personal liability special clause

Personal liability insurance is a special policy that covers damages caused to others due to accidents or troubles that occur in daily life.

For example, it covers all kinds of liability that arise in everyday life, such as bicycle accidents, pets injuring others, or children damaging other people’s property.

By adding this special clause, you will be able to live your daily life with peace of mind, knowing that you will be compensated even if you cause damage to someone else in an unexpected accident.

This special clause can help support the financial burden, especially if you live with your family or have pets at home, as unexpected accidents and troubles are more likely to occur.

Family Bike Special

The Family Bike Special Clause is a special clause that provides compensation for mopeds of 125cc or less that are driven by the named insured or their family members. This special clause provides compensation for bodily injury and property damage caused by motorcycle accidents, as well as compensation for injuries.

If you have a family member who regularly uses a moped, adding this special clause will cover liability and medical expenses in the event of an accident. Since mopeds are said to be particularly prone to accidents, using this special clause will help you prepare for the unlikely event of an accident.

summary

①Automobile insurance is broadly divided into two types: “Compulsory automobile liability insurance” and “Optional automobile insurance”

② If necessary, you can get generous support by purchasing optional insurance.

③ Voluntary insurance is divided into two types: “agency-type automobile insurance” and “direct automobile insurance.”

4. The optional insurance you should take out depends on whether you want to indemnify the other party or yourself.

⑤Adding special clauses will give you even more comprehensive coverage

May 28, 2025
Will help me get cheaper car insurance? The strange situation regarding car insurance in the USA

The insurance industry is constantly changing at a rapid pace, with premium revisions and new product launches. With the recent advances in IoT and AI technology, the development of “telematics insurance” is also underway in car insurance, which offers lower premiums to drivers who rarely brake or accelerate suddenly. With these technological advances, the conditions that determine individual insurance premiums are expected to become increasingly complex and sophisticated. In this article, we would like to introduce a slightly unusual method of calculating car insurance premiums in the United States.

What factors affect car insurance rates in California?

Q: Automobile insurance premiums vary depending on various factors such as age, but in California, certain data is related to premiums. What is that data?

[Explanation]
In Japan, if you have a gold driver’s license or if you drive a small distance per year, you will receive a discount on your car insurance premium. The same discount services are available in the United States, where the premiums vary depending on the policyholder.

In many states in the United States, you can get a driver’s license when you turn 16, so even high school students drive to school or to lessons. This is a little hard to imagine in Japan, but in the vast country of the United States, there are many areas without public transportation, and cars are a very important means of transportation, so even high school students actively obtain driver’s licenses and drive cars normally.

For these reasons, in the United States, where students have many opportunities to drive cars, when students apply for car insurance, their premiums are discounted depending on their school grades. This is based on statistics that show that students with good grades are less likely to have traffic accidents.

The coverage varies! What’s included in American car insurance?

In California, it is mandatory to have automobile insurance, so you must take out insurance as soon as you buy a car. The insurance company will pay compensation when you are liable for damages in a personal injury or property damage accident. The amount of compensation for “liability” is determined by the

minimum limit for personal injury and property damage, and the insurance premium changes depending on the amount of compensation. In addition, if you are stopped by a police officer while driving or when registering your car, you will be required to present your automobile insurance certificate, and if you do not have insurance, you will be subject to a fine. However, since

“liability” is automobile insurance in case you are liable for damages, it does not cover your own medical expenses or car repair costs. Therefore, various types of compensation are available to protect yourself and your passengers.

■ Passenger Insurance (Medical)
If the driver or passenger is injured in an accident, it will cover medical expenses and other costs up to the limit.

■Uninsured Motorist Insurance:
Covers the policyholder’s medical expenses and damage to the car in the event that the other party is liable for compensation in an accident, but is not covered by automobile insurance and is unable to pay.

■Collision & Comprehensive Insurance:
Covers damage to the car in the event of an accident, theft, fire, vandalism, etc. Insurance premiums are set in detail according to the year, model, and grade of the car.

In addition, there are services that cover the rental car costs required to repair the car after an accident, and services that cover the towing costs of a car that is disabled due to an accident.

Just like Japanese car insurance, you can choose from a variety of services according to your preferences.

In the United States, there is a risk of accidents with uninsured vehicles.

In Japan, there is a vehicle inspection system, and if you do not have compulsory insurance, you will not pass the inspection. In addition, when canceling compulsory insurance, you need a document proving that the car has been scrapped, and there is a system in place to prevent cars without compulsory insurance from driving on public roads.

On the other hand, the United States also has a vehicle inspection system, but it is mainly an inspection to check the condition of the car, and in some states it is only a simple check. Also, since there is no system to check taxes and insurance enrollment like in Japan, there is no strict check on whether the car has liability insurance, which is actually mandatory. Due to these differences in the vehicle inspection system, even in California, the percentage of people without insurance is decreasing year by year, but it is said that one in seven people is uninsured as of 2015.

Therefore, “Uninsured Motorist Insurance” to prepare for accidents with uninsured motorists plays an important role in avoiding risks.

In both the United States and Japan, it is important to consult with an expert to determine the details of your compensation.

In the United States, where there are various systems depending on the state, not only the laws but also the discount system for car insurance differs depending on the region you live in. Therefore, when choosing car insurance, it is important to use the consulting of the insurance company to have the best plan proposed to you.

In Japan, by using the consulting of the insurance company, you can efficiently prepare compensation that suits you from a large number of car insurance.

■ Personal injury insurance
A comprehensive plan is available that can cover traffic accidents while walking for your family. ■ If you subscribe as a special clause for

personal liability insurance

, you can cover liability in case you become the perpetrator in an accident while riding a bicycle. It can be quite difficult to choose the best compensation that suits your car life from the many car insurance plans. With the advent of the “telematics insurance” mentioned above, the car insurance industry is undergoing major changes, so why not take this opportunity to reconsider what compensation you really need.

May 28, 2025
[Working in the US] Anti-Money Laundering in the Insurance Industry
When people hear the term “money laundering,” many know that it is illegal, but few people know what it means or what it generally entails.

Financial professionals who sell life insurance and annuities need to understand the meaning and overview of the term.

This is because life insurance and annuities can potentially be used as money laundering tools.

This time, we have summarized money laundering and life insurance.

table of contents

What is Money Laundering?

Money Laundering Structure

Placement

Layering

Integration

Money Laundering and Life Insurance

The process of money loaning with life insurance

Examples of life insurance being used for money loaning

Other possibilities

Money Laundering Regulation

Bank Secrecy Act of 1970

The USA PATRIOT Act of 2001

FinCEN Final Rules

Anti-Money Laundering Act of 2020

summary

What is Money Laundering?

“Money laundering” is “the process of incorporating illegally obtained money into the legal monetary system while concealing its origin.”

Money laundering is a necessary process from a criminal’s point of view, because money of unknown origin (unlaundered, “dirty” money) can easily be traced and therefore cannot be freely spent.

In Japanese, this is called “money laundering.”

Once the money has gone through this process, it appears legitimate and can be used or invested however you like.
Money Laundering Structure
There are countless ways to launder money, but it basically consists of three steps:

Placement: The stage where criminal proceeds are incorporated into the financial system.

Layering: The stage where the source of funds is obscured

Integration: The stage where funds are injected into legitimate economic activities.
Placement

Placement is the step that brings illicit cash into the legitimate financial system.

The purpose of this step is to physically separate the money from the criminals, making their origins more difficult to discern if they are traced.

This means avoiding financial accounts or products that record ownership.

This is usually done by converting cash into cash equivalents such as checks, money orders, bank drafts, traveller’s checks and wire transfers.

When moving large amounts at once, you may need to split them into multiple smaller transactions due to reporting and record-keeping requirements. This is characteristic of what happens during the Placement phase.

Layering

This is a process to further conceal its origin.

Simply exchanging cash for money orders and depositing those orders into personal bank accounts does little to hide a criminal’s connection to the crimes.

This process involves repeated transfers and the purchase of various financial products to obscure the source of the money.

Cash Value Life Insurance and Deferred Annuity Contracts are used for this purpose.

The insurance policies purchased may be cancelled immediately or held for an extended period of time.

Anything that is held for a long time changes ownership frequently.

For example, ownership of a life insurance policy may be transferred to a third party as a charitable donation.

By obscuring the source of premiums paid, the transferred owner is more free to exercise contract privileges with withdrawals.

Integration

This is the final process.

Here, the purified money makes its way into criminal hands and eventually into the financial system.

Once the money has been laundered it can be used immediately.

This money can be invested or used publicly, and questions as to its origin can be legitimately answered.

Money Laundering and Life Insurance

Money Laundering usually comes at a price, and by the time the entire process is complete, it may be worth much less than its original value.

This is because those who provide money laundering are aware of the risks and importance of the service, so they charge a fee when laundering money or the money becomes worth less than its original value in the process.

For this reason, life insurance and annuities are sometimes used for money laundering.

There are cases where insurance companies sell life insurance without conducting detailed checks.

The process of money loaning with life insurance

Cash Value Life Insurance and Deferred Annuity Contracts allow owners to access funds through policy loans, partial withdrawals or complete surrender.

In particular, free-look surrenders are more attractive to criminals because they allow them to avoid surrender charges.

It will be considered a reasonable Business Expense for the privilege of accessing the contracted Value as needed.

Regardless of the form of distribution, a check issued by the insurance company gives legitimacy to the payment.

Funds obtained in this manner appear to be completely legitimate and can be sent or wired anywhere.

Examples of life insurance being used for money loaning

In the past, it has been revealed that drug trafficking organizations outside the United States have purchased large amounts of cash value life insurance in the United States, the United Kingdom, and other locations through a small number of insurance brokers.

The policies were purchased with tens of millions of dollars worth of drug sales that were sent to the insurance companies by third parties around the world via check and wire transfer.

Policyholders who were associated with drug trafficking organizations received checks or wire transfers from the insurance companies for what appeared to be legitimate insurance payments.

Other possibilities
You can buy a life insurance policy and then cancel the policy during the free-look period to receive a refund of your premiums. The returned premium can then be used to purchase other assets or investments, adding a layer to the process and allowing the money to work its way into the financial system.

You can purchase a life insurance policy and use the value of the policy as collateral for a loan to purchase real estate. The loan is repaid by surrendering the policy, and you now own an asset that you can keep or sell at a later date.

Using the illegal funds, they may purchase life insurance policies from terminally ill insureds, designating an offshore company or a group of foreign investors as the beneficiary of the policy. When the insured dies, the proceeds are paid to the company or investors as a legitimate death benefit.
Money Laundering Regulation

Federal anti-money laundering laws have evolved over the past several decades.

The history of AML regulations began in 1970 with the Bank Secrecy Act.

The law that has the greatest impact on insurance companies is the USA PATRIOT Act, which is a direct successor to the Bank Secrecy Act.

The USA PATRIOT Act created Financial Crimes Enforcement Network (FinCEN) regulations that govern AML requirements and responsibilities for insurance companies.

Source: History of Anti-Money Laundering Laws (Financial Crimes Enforcement Network)
https://www.fincen.gov/history-anti-money-laundering-laws

Bank Secrecy Act of 1970
The first significant federal AML law in the United States.

Established a requirement for financial institutions to report large cash deposits.

Initially targeted only at banks, it now requires financial institutions to keep records and report cash (or cash equivalent) transactions in excess of $10,000.

The information provided will be used by domestic and international law enforcement agencies to identify and prosecute money laundering.

What’s included:

Cash payments over $10,000 received in a trade or business from a single buyer must be reported to the IRS on Form 8300.

Companies and individuals with foreign bank accounts, brokerage accounts, mutual funds, unit trusts, or holdings totaling more than $10,000 must report their accounts annually to the IRS.

Banks are required to file Suspicious Activity Reports (SARs) about “suspicious activities related to possible violations of law or regulation.”
The USA PATRIOT Act of 2001

The Uniting and Strengthening America Act (The USA PATRIOT Act) is a law passed after the September 11, 2001 terrorist attacks.

It was created to strengthen weaknesses in the U.S. economic system that may have contributed to this terrorist attack.

Among its provisions, the USA PATRIOT Act amended certain parts of the Bank Secrecy Act to extend its application to non-bank financial institutions, including insurance companies and securities firms.

Additionally, the act increased law enforcement’s ability to search electronic communications and medical, financial and other records.

Importantly for the insurance industry, it expands the Treasury Department’s authority to regulate financial transactions, particularly those involving foreign individuals and entities.

FinCEN Final Rules
Due to the nature and complexity of insurance products, additional guidelines are needed to define how insurers should comply with AML requirements.

Developing and implementing anti-money laundering programs for insurance companies

Insurance companies report suspicious transactions
Anti-Money Laundering Act of 2020

The Anti-Money Laundering Act of 2020 (AMLA) further expands the Bank Secrecy Act and requires the adoption of additional priorities for anti-money laundering activities.

One of the priorities, and one being addressed by FinCEN, is efforts to detect and eliminate cybercrime, including procedures related to cybersecurity and virtual currency considerations.

The AMLA also includes the Corporate Transparency Act (CTA), which adds beneficial ownership reporting requirements.

summary

If a client purchases a product for the purpose of money laundering and you do not respond appropriately, you may be held legally responsible.

If you work in the business of dealing with life insurance or annuities, you will not only need to obtain a license, but you will also need to have knowledge about money landering and be able to handle it appropriately.
May 28, 2025