You can apply for it yourself! How to choose fire insurance for rental properties and our top 5 recommendations

The necessity of taking out fire insurance when renting

In most rental properties, the landlord or management company will require you to take out fire insurance.

If a fire breaks out in your room, you will have to pay compensation not only to the property owner, but also to your neighbors and those living downstairs who were affected by water damage while putting out the fire.

Therefore, although it is not legally compulsory to take out fire insurance, some people choose to do so of their own volition.

It would be difficult to pay damages worth tens or hundreds of millions of yen on your own. That's why you need to take out fire insurance.

Can I buy fire insurance for my rental property myself?

You can take out fire insurance for your rental property yourself.

Real estate agents will try to force you to take out fire insurance, but be sure to tell them "I will take out the fire insurance myself."

If you get permission from your landlord or management company, you can join on your own.

When joining, you will need to confirm the amount of renter liability insurance coverage with your landlord or management company before applying.

After that, you will need to process the membership application yourself.

Real estate companies will check the status of your fire insurance procedures before you move in, so you should complete the procedures at an insurance agency or online before moving into the property.

You will need to submit a copy of the application form or your insurance certificate, so be sure to keep a copy.

If you find it troublesome to apply for fire insurance yourself, you can simply sign up for the fire insurance plan offered by the real estate company, and the real estate company will handle all the application procedures for you.

If you want to avoid the hassle as much as possible, it may be a good idea to leave it to a real estate company.

Main coverage of rental property fire insurance

Here we will explain in detail what is covered by fire insurance for rental properties.

Rental property fire insurance covers all habitable areas of the property.

There is also compensation for your landlord, compensation for your own belongings, and compensation for others (such as your neighbors).

If you are purchasing fire insurance yourself, be sure to understand the important information.

Fire insurance coverage and payment terms

Fire insurance not only covers damage caused by fire, but also covers damage caused by wind, hail, and floods.

However, insurance payments will only be made if damage occurs due to a sudden accident (lightning strike, rupture, explosion) or an unexpected falling or water leak.

Please note that insurance will not cover accidents or damages caused by the willful or negligent acts of a legal heir.

Types of Fire Insurance

There are four main types of fire insurance. We will explain the role of each in order.

• Tenant liability insurance (insurance to compensate the landlord)
• Home contents insurance (insurance to cover your own furniture and appliances)
• Personal liability insurance
• Earthquake Insurance

Renters liability insurance

Renters liability insurance is insurance that compensates the landlord for damages. It is the most important type of fire insurance for rental housing.

For example, if a room is damaged in a sudden fire, the tenant is obligated to restore it to its original condition.

Renovating a room lost in a fire or other accident can be quite costly, and renters liability insurance is available to cover these costs.

The amount of insurance coverage varies depending on the insurance company, but ideally it should be between 5 and 10 million yen.

The amount of insurance you need will need to be decided in consultation with your landlord, so be sure to check with your real estate company.

Home contents insurance

Home contents insurance is insurance that covers furniture and appliances that you bring into your home other than the building.

Household goods refer to furniture and appliances necessary for daily life such as televisions, computers, sofas, beds, etc. Luxury items such as jewelry and antiques are not included.

When it comes to home insurance, some people choose not to purchase coverage in order to reduce their premiums.

However, under the Civil Code (Article 709, Fire Liability Act) there is no obligation for the perpetrator to pay compensation to the victim when it comes to household goods unless they are grossly negligent, so we recommend that you take out compensation to protect your own lifestyle.

The reference amount of insurance is as follows:

	Family Composition	2 people	3 people		4 people			5 people				Single households
		Married couple only	couple		couple			couple
Age of head of household	child	-	1 person	-	2 people	1 person	-	3 people	2 people	1 person	-
	adult	-	-	1 person	-	1 person	2 people	-	1 person	2 people	3 people
Around 25 years old		550	640	680	730	770	810	820	860	900	940	300
Around 30 years old		710	800	840	890	930	970	980	1,020	1,060	1,100
Around 35 years old		990	1,080	1,120	1,170	1,210	1,250	1,260	1,300	1,340	1,380
Around 40 years old		1,220	1,310	1,350	1,400	1,440	1,480	1,490	1,530	1,570	1,610
Around 45 years old		1,400	1,490	1,530	1,580	1,620	1,660	1,670	1,710	1,750	1,790
Around 50 years old		1,480	1,570	1,610	1,660	1,700	1,740	1,750	1,790	1,830	1,870

*Source: Zurich Insurance Company (amounts vary depending on insurance company)

The above amounts are only a guideline, but a single person will need at least 3 million yen in coverage, and a family with children will need more than 10 million yen in coverage.

In the unlikely event that your belongings are lost in a sudden accident, you will need to replace all of your belongings.

We tend to think that our possessions are not that important, but buying all the necessities of life can end up being a big expense.

Calculate the value of your belongings and set the insurance amount with some leeway.

Personal liability insurance

Personal liability insurance is insurance that compensates for damage caused to others due to sudden negligence.

For example, you would be compensated if the hose from a washing machine came off and caused damage to the room of the person living downstairs.

Personal liability insurance covers not only the damage to your home, but also accidents such as your child injuring someone else in a sudden accident, or your pet biting someone and injuring them.

The maximum amount of personal liability insurance per person is 100 million yen.

If you have other insurance, such as automobile insurance, you cannot claim compensation from more than one place.

Check whether your car insurance or personal injury insurance includes personal liability insurance.

Earthquake Insurance

Fire insurance does not cover damage caused by natural disasters.

However, because earthquakes have caused a lot of damage in various parts of Japan, the government recommends taking out earthquake insurance in addition to fire insurance.

However, earthquake insurance cannot be purchased on its own; it must be purchased as an add-on to fire insurance.

Also, there are some insurance companies that do not offer earthquake insurance.

Earthquake insurance premiums vary depending on the region.

If you have paid insurance premiums, they will be eligible for insurance premium deductions during the year-end adjustment or tax return for the year in which you paid them.

Points to consider when choosing fire insurance for rental properties

I'm sure there are many people who want to take out fire insurance for their rental property but don't know which insurance to choose.

So, here's how to choose the right fire insurance for your needs.

There are only a limited number of insurance companies that offer fire insurance for rental properties, but each insurance company has its own characteristics, so choose based on your needs, such as whether you want to prioritize compensation or low premiums.

In addition, in the unlikely event of an accident, how to claim insurance is also important. We will introduce four points on how to do so.

Choose by insurance premium

If you want to keep your insurance premiums low with the minimum coverage, we recommend choosing based on insurance premiums.

Insurance proposed by real estate companies often has an average premium of around 18,000 to 20,000 yen over two years.

However, rental fire insurance offered on the Internet or through brick-and-mortar insurance agencies and insurance companies is often in the price range of around 4,000 to 6,500 yen for a two-year insurance period.

The reason for the difference in amount of more than 10,000 yen is because the amount of coverage for household goods and renters liability insurance is set higher.

There are two ways to lower your insurance premiums:

• Reduce your home insurance coverage
• Reduce the amount of renters liability insurance

You can reduce the amount of your home insurance coverage by calculating the value of your own belongings.

The optimal amount of renters liability insurance is one that covers the cost of repairs to restore the room to its original condition.

For a condominium, you will need over 30 million yen, but for a 1DK room in a wooden apartment, the best price is 10 to 20 million yen at most.

Ultimately, it is up to the landlord or management company to decide, but they will usually agree to an insurance amount of at least 10 million yen.

Understand two key points for lowering your insurance premiums and compare them with insurance premium estimates.

Choose based on additional clauses and free house services

Depending on the insurance company, there are companies that offer low-cost home contents insurance and companies that also cover compensation for third parties and damage caused by natural disasters.

There are also courses that only cover renters liability insurance, personal liability insurance, and household contents insurance, as well as plans that include special coverage for attorney's fees and other expenses.

If you add additional coverage, your insurance premiums will also increase.

When adding special clauses, it is a good idea to consider your living environment and daytime lifestyle and add additional clauses.

Some insurance companies also have their own home service desks. In addition to providing compensation, they also offer their own house assist services.

Choose how to join

You can apply for fire insurance for rental properties at a brick-and-mortar insurance agency or online.

The application process varies depending on the insurance company, and if you apply online you can apply 24 hours a day.

If you are busy during the day, we recommend applying online. If you would like to consult an insurance professional about fire insurance, we recommend applying at a brick-and-mortar insurance agency.

Choose the insurance claim method

Ease of filing insurance claims is an important aspect when taking out insurance.

In the unlikely event of an accident, we will process your insurance claim.

When you are busy during the day, filing an insurance claim over the phone can be a significant time burden.

Recently, there has been an increase in insurance companies that allow accident claims to be made over the Internet and insurance companies that have accident hotlines that are open 24 hours a day.

Another important point is to find an insurance company that can make claims quickly even if you are busy.

5 Recommended Rental Fire Insurance Options

Here are 5 recommended fire insurance plans based on the points to consider when choosing fire insurance for rental properties. We have mainly selected non-life insurance companies.

[Secom General Insurance] Peace of mind home insurance

Secom's rental property fire insurance, "Anshin My Home Insurance," can be applied for at a brick-and-mortar insurance agency.

You can consult with an insurance professional to determine the compensation details and amount of insurance.

Since theft coverage is automatically included, this is the ideal fire insurance for those who own high-spec household goods.

[Sompo Japan] THE Home Insurance

Sompo Japan's rental property insurance, "THE Household Goods Insurance," is insurance for household goods, but renters liability insurance is automatically included.

In addition, personal liability insurance can also be added, so we recommend consulting with the agency's staff to decide on a plan.

[Rakuten General Insurance] Living Assist

Rakuten Sompo's fire insurance for renters, "Living Assist," is simple and provides all the necessary coverage.

We recommend this policy to Rakuten users as you will receive Rakuten points with your insurance premiums.

In addition to compensation, we also provide a wide range of additional services, such as house assistance services and free legal consultation services for apartment residents.

[Nisshin Fire Insurance] Insurance when renting a room

Nisshin Fire Insurance's "Insurance when Renting a Room" is popular for its easy-to-understand coverage, and is an inexpensive fire insurance policy with annual premiums starting from 4,000 yen.

The limit for household goods can be set up to 20 million yen, so this plan is recommended for those who place importance on their household goods.

Enrollment procedures and address changes can be done online, and 24-hour home support from Sumai Support 24 is also included.

[Zurich Small Amount Short-Term Insurance] Minicare Rental Insurance

Zurich Small and Short-Term Insurance's "Minicare Rental Insurance" can be completed by applying for membership and reporting accidents entirely on the website.

It is ideal for those who want to apply easily themselves and those who want to keep initial costs down.

The insurance premiums are low and the coverage necessary for rental housing is comprehensive, but since it is a small amount insurance, renters liability insurance and personal liability insurance are limited to a maximum of 10 million yen.

summary

This time, we introduced fire insurance for rental properties, including insurance coverage and recommended fire insurance plans.

There is no legal requirement to take out fire insurance for rental properties, but if you cause damage to your landlord or neighbors, you will be held liable for compensation, so it is a good idea to take out fire insurance.

Also, you can choose your own fire insurance for rental properties, so we recommend that you choose the insurance that suits you rather than the one presented to you by the real estate company.