Confronting earthquake risk in Japan—are private households underinsured?

Abstract

Despite the fact that Japan is an earthquake-prone country and Japanese people are known to be highly risk averse, less than half of Japanese households are insured against earthquake risk. Based on a survey among experts in the field, the article gives an overview of earthquake insurance schemes and evaluates possible reasons for the relatively low level of insurance and ways for improvement. Experts agree that more insurance is desirable, but they share a less clear opinion about the causes and possible remedies. More research is warranted.