Insurance industry leader Tokio Marine & Nichido Fire Insurance Co. and other nonlife insurers are considering ending sales of fire insurance policies with terms over 10 years in fiscal 2006, industry sources said Tuesday.
The move would mean new customers who want long-term coverage would effectively face premium hikes because the discount rates on premiums for policies with terms of 10 years or less are lower than those for existing policies with longer terms, they said.
In addition, customers would have to pay paperwork fees to renew the policies every 10 years, they said.
Nonlife insurers have usually offered home buyers long-term fire insurance coverage, such as 30-year policies, to correspond with the terms of their mortgages.