In Japan, purchasing primary insurance is legally mandatory for every vehicle owner. The insurance name is Compulsory Automobile Liability Insurance ("Jibaiseki" in Japanese). CALI is mainly for protecting traffic accident victims. Although the coverage of CALI is not wide and sufficient, it compensates for bodily damages of almost all the victims. In this article, we take a closer look at what it is and how it works.
What is CALI (Jibaiseki)?
CALI is run by the Japanese government. Its insurance premium is determined by cabinet order, and the payout rate is determined by the Minister of Land, Infrastructure, and Transport or Prime Minister. It's available to purchase CALI in insurance brokers, car dealers, automobile repair shops and etc. CALI has a fixed insurance rate and fixed contractual coverage. Traffic accident victims can apply for the payout to those mediators, but remember that they are just sellers. GIROJ (General Insurance Rating Organization Japan) which is also run by the Japanese government operates investigation for your damage and decides the amount of payout.
CALI is legally mandatory to carry for all of the owners of major vehicles. (Supported by the Japanese Law, Act on Securing Compensation for Automobile Accidents) With CALI, vehicle owners fulfill the minimum responsibility to compensate for traffic accident victims. If you don’t carry it, you will be imposed a penalty of one year of imprisonment or fine of under ¥500,000. About CALI's price, see this article on CALI's price and shaken.
Since CALI is legally mandatory for every vehicle, almost all the traffic accident victims can get the payout from CALI. It's critical for every victim to know its coverage and how to apply for payout.
Coverage of CALI
CALI was established for the relief of traffic accident victims. It only compensates for injured or dead victims. It doesn't cover the at-fault party's physical damages. Besides it never covers property damages.
In the following table, you can find two occasions CALI pays to you and the corresponding upper limit of payment.
|Case||The upper limit of insurance money|
|(1) A victim got injured.||Maximum JPY1,200,000|
|(2) A victim was dead.||Maximum JPY30,000,000|
Note that these are not the amount that will be paid to a victim for sure, but its insurance money will be paid out based on your actual damages. In the following article, you will find both economic and non-economic damages which will be covered by CALI.
- Cost breakdown of CALI's payout for an injured victim
- Cost breakdown of CALI's payout for a dead victim
Aside from the above two occasions, CALI also compensates for victims left with residual disability in a traffic accident. The upper limit of payment for residual disability is JPY40,000,000. However, being different from the above two occasions, the insurance money for residual disability will not be based on your actual damages. CALI has an original table showing the grade of your residual disability and the insurance money depends on the grade. If CALI admits your disability falls into 3rd grade, the total amount of ¥22,190,000 will be paid to you for sure. See Tables of CALI's compensation for residual disability.
Since CALI's coverage is minimum, it's not sufficient for covering all the losses of victims in most cases. For example, if you're hospitalized due to the injury for a month, CALI's payout of JPY1,200,000 is sometimes not sufficient even for the medical expenses. So more than 74% of drivers additionally purchase voluntary insurance to fulfill the responsibility to compensate for the victim's damages.
For hit-and-run accident victims or victims hit by a non-insured car
CALI is mandatory for every vehicle owner, however, what if you are hit by a car that doesn't carry CALI? For relieving such victims, the Japanese government has a special plan called "Government Compensation Plan". It's for victims of a hit-and-run accident or victims hit by a non-insured car. It offers the same amount of compensation as CALI. You can apply for the payout from the plan via third party organizations like insurance companies, just like applying for the payout of CALI.
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