Sales of one-day car insurance policies have been increasing as a growing number of young people are driving borrowed cars on vacation and when they visit their parents, industry sources say.
Since 2012, major nonlife insurers such as Tokio Marine have sold approximately five million one-day insurance policies to cover compensation for possible car accidents, reported The Mainichi.
As a comparison, Mitsui Sumitomo Insurance assumes approximately 16 million people drive cars at least once a year but do not own cars.
The one-day policies cover compensation for accidents that the holders cause while driving cars held in the names of other people. They have been developed on the assumption that policyholders drive their parents' cars when they are staying in their hometowns or they and their friends take turns in driving the same car on trips. These policies do not cover rental cars and car sharing systems.
People in their 20s account for approximately 80% of one-day car insurance holders, and the sales of such insurance policies spike during summer and other holiday periods. Consumers can easily buy one-day automobile insurance policies at convenience stores or on their smartphones with the minimum premium being JPY500 (US$4.50).
A growing number of people, particularly younger generations, are choosing not to own cars. According to the Japan Automobile Manufacturers Association, those aged below 30 made up only 6% of car owners in 2015, down from 14% in 2001. At the same time, the number of those who possess a driver's licence has increased by 3.6% over the past decade.