Akiya-Akichi Kanri Center, a Tokyo-based nonprofit organisation that manages unused houses and land, has introduced a new insurance product designed to mitigate the financial risks associated with vacant properties.
This strategic initiative, in partnership with Nisshin Fire & Marine Insurance Co, marks a significant step towards offering a tailored insurance solution that addresses the challenges of insuring properties that have remained uninhabited for extended periods, including demolition costs and liabilities in case of fires.
According to Mainichi's report, the insurance policy is a part of the organisation's broader effort to support property owners by providing comprehensive coverage for liabilities related to vacant homes, costs of demolition, and compensations due to fire incidents.
Initiated in 2024, this program is a complementary addition to the nonprofit's array of services dedicated to the upkeep and management of empty residences.
The policy's coverage is extensive, ensuring up to 100 million yen (approximately $670,000) against damages to adjacent properties or injuries to individuals, potentially caused by structural failings or other hazards of the unoccupied homes. In scenarios involving fire, the insurance promises to cover demolition costs ranging from 1 to 2 million yen ($6,700 to $13,400), along with compensation between 100,000 and 200,000 yen ($670 to $1,340) to neighbouring households.
To augment this insurance offering, the organisation provides vacant home management services, executing regular maintenance checks and operations to maintain the property's condition. Property owners can choose between a basic service plan, priced at 2,750 yen (around $18) monthly, and a more comprehensive option at 6,600 yen (about $44) monthly, which includes advanced interior maintenance and waste removal. Both plans integrate the specialised insurance coverage for vacant homes.
The urgency for such a specialised insurance solution is underscored by data from the Ministry of Internal Affairs and Communications, revealing a steady increase in the number of long-term vacant homes across Japan – from 1.82 million in 1998 to 3.49 million in 2018. This rise highlights a national average of 5.6% of all homes lying vacant, with significant regional disparities.
Particularly alarming is the prevalence of properties constructed before the 1981 implementation of enhanced earthquake-resistant building standards, spotlighting the acute need for protective measures like those offered by the nonprofit.
