Japanese Firms to Raise Auto Insurance Premiums by 3 Pct
Tokyo, Aug. 5 (Jiji Press)--Major Japanese nonlife insurance firms plan to raise automobile insurance premiums by about 3 pct around January next year, industry officials said Monday.
The move reflects a consumption tax increase set for October, which will push up automobile repair costs, as well as the wider adoption of expensive car parts in line with the increased use of automatic brakes and other driving support systems.
Another factor is the implementation of the revised Civil Code next April, which will increase the levels of compensation required for accidents resulting in injury or death.
In the revised Civil Code, the statutory interest rate will be lowered from the current 5 pct to 3 pct in April.
Compensation for people injured or killed in traffic accidents is calculated by discounting the victims' potential income by the statutory interest rate, meaning that the amount of compensation will increase when the rate is lowered.
[Copyright The Jiji Press, Ltd.]