“We are seeking to encourage [young people] to buy cars by reducing the financial burden for them to sign up for collision coverage,” a Sompo Japan official told Japan Today. The official added that the number of insurance policies has seen year-on-year increases since the insurer introduced the expanded discounts in January.
Meanwhile, Aioi Nissay Dowa Insurance has released a simplified car insurance policy for younger drivers. It offers only the most basic coverage, leading to premiums that are around 10% lower than the company’s regular products.
The insurer also released a temporary auto insurance policy, for young drivers who do not have a car of their own, but drive a rental car or borrow a friend’s car from time to time. The “One Day Support” policy is valid only for one day and costs just ¥1,500 with collision coverage and ¥500 without.
Usually, younger drivers pay higher premiums due to the perception by insurance companies that they are inexperienced and high-risk drivers. This leads to a decline in car ownership, affecting both automakers and auto insurers.
In 2017, Sony Assurance Inc. surveyed 1,000 18-year olds and it found out that 56.3% had driving licences, but just 16.8% had their own car. While almost half (48.9%) said that they were interested in buying a car, close to seven in 10 (68.4%) said that they could not afford it.