Though property insurance for damage caused by earthquakes is available in earthquake-prone Japan, there is, technically speaking, no such thing as earthquake insurance. Thanks to a deal struck by the national government and private insurers in the 1960s, individual homeowners who take out fire insurance policies can add a rider for earthquakes (which also includes tsunami and volcanos). Claims are paid out of a large fund that is maintained by the two partners, and according to the Nihon Keizai Shimbun this fund currently contains ¥2.3 trillion. The insurance industry projects that there will be about 500,000 claims filed for property damage, amounting to ¥1 trillion in payouts.

So there's enough money in the fund to cover at least private individual claims. However, when you look at the policies in detail these payouts will not be enough to recoup much of what was lost in the disaster. Available fire insurance policies(kasai hoken) for private homes cover up to ¥50 million if the entire home is destroyed (zenkai), and people can insure other property, such as furniture, for up to ¥10 million. However, earthquake insurance only covers 30 to 50 percent of what fire insurance covers. So if the coverage of your fire insurance policy is ¥10 million, you only receive from ¥3 million to ¥5 million when the home is destroyed in an earthquake. Moreover, damage insurance only covers the value of the home at the time of the accident or disaster, so if the value has decreased over time, you will only receive payments based on that lesser value. And fire insurance by itself usually does not cover a fire caused by an earthquake. You need coverage for both.

It's assumed that the average payout in the Great Eastern Japan Earthquake for homes with coverage will be between ¥2 million and ¥3 million. The average damage insurance payout for the Great Hanshin Earthquake was a bit over ¥1 million per home. Altogether 65,000 claims were made for a total of ¥78 billion. At that time, only 9 percent of homes nationwide carried earthquake insurance, and only 3 percent of homes in Kobe did. Since then, the national portion has increased to 23 percent. In 2009 alone, 46.5 percent of homeowners who took out fire insurance added earthquake coverage. Not surprisingly, sales vary widely from one region to another based on frequency of temblors. In geologically active Aichi, Tokyo and Miyagi, as much as 30 percent of homeowners have earthquake insurance. The portion drops down to 15 percent in Gunma and Nagano prefectures.