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This time, it was distributed on CONSPIRIT's official channel on YOUTUBE.Episode 44: Boost your quality of life with real estate management!I would like to send you the contents.

I would like to briefly summarize the key points of the revisions to the fire insurance system and rates that took place in October 2022 this year.

Fire insurance system and reasons for rate revision

First of all,
The last time fire insurance rates were increased was in January 2021, so why are there other revisions in such a short time? There are two main reasons for this.

The first reason is, as you are well aware, the increasing scale and frequency of natural disasters in recent years.

In particular, it is said that the "catastrophic risk reserve," which is intended to cover severe disasters such as the successive large typhoons that occurred in 2018 and 2019, has been halved.
In addition, reflecting the high disaster risk in Japan in recent years, reinsurance premiums, which transfer part of insurance payments to overseas insurance companies, also appear to be skyrocketing.
The second reason is said to be to cover the increased costs of strengthening damage investigations due to the increase in fraudulent insurance claims.

These are the main factors behind the current revisions to the system and rates.

Fire insurance system and rate revisions Key points of revisions

Now, I would like to highlight some of the key points of this revision.

① Insurance premium increase

What is different from the past is that there has been a significant price increase for older reinforced concrete structures due to an increase in accidents caused by the deterioration of auxiliary facilities such as water supply and drainage systems over time.

② Shortening of period

The maximum insurance period was previously 10 years, but this has been shortened to 5 years with this revision.
This is likely to reduce the benefits of lump-sum payment discounts considerably.

3) Raising the minimum deductible

Due to an increase in accidents other than natural disasters, the minimum deductible amount that you will be responsible for has been raised for "water damage accidents," "breakage/soiling accidents," and "electrical/mechanical accidents."
This is said to lead to cost reductions by cutting out small, minor insurance claims, which account for the majority of accidents.

4) Insurance payment changes after construction is completed

As a measure to prevent fraudulent claims, and to prevent "insurance claims based on the assumption that recovery will not occur," in principle, documents that can verify recovery must be submitted when making an insurance claim.
In other words, the insurance payment will be made after the construction is completed, so you will be required to pay the construction costs up front.

Summary of the fire insurance system and rate revisions

What do you think?

The October 2022 amendments go beyond simply raising insurance premiums; they also include many system reforms that will have a significant impact on real estate owners.

Since fire insurance is almost essential when purchasing real estate, I believe that this revision of the system will also bring about changes in your purchasing decision-making and investment judgments.

I think this is something that will happen to most people, so I hope you will take the time to review it.

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