When people think of typhoon preparation, water, emergency food and mobile batteries come to mind — but there is one more preparation that tends to be forgotten: "financial disaster prevention" — getting ready to recover your money if disaster strikes. If flood coverage has been removed from your fire insurance policy, no insurance money is paid even for above-floor flooding; and if you rush to clean up without taking photos, you are at a disadvantage both for the disaster victim certificate (risai shomeisho) and for your insurance claim. After a disaster, another decision awaits: which of two tax relief systems to choose — the casualty loss deduction or the Disaster Exemption Act. Before typhoon season arrives (roughly July to October), let us sort out the points to check now, while things are calm.
Know the "flow of money" after a disaster in advance
If you start researching only after being hit, you will be too busy with cleanup, evacuation and work to keep up. Knowing the overall picture in advance makes decisions — what to keep as evidence, what to apply for — much faster. After a disaster, money comes back through three main routes.
- Insurance payouts from insurers and mutual aid (kyosai) — windstorm and flood coverage under fire insurance or fire mutual aid. Financially the biggest pillar; claims go to the insurance company or mutual aid
- Public support — livelihood reconstruction support grants, emergency repairs and other aid based on the damage classification in the disaster victim certificate. The contact point is your municipality
- Tax relief — the casualty loss deduction or the Disaster Exemption Act on your income tax return, ordinance-based reductions of resident tax and fixed asset tax, extension of filing deadlines and deferral of tax payment. Contact points are the tax office and the municipality
What works across all three routes is "records of the damage (photos)"; what routes 2 and 3 require is the disaster victim certificate. In other words, pre-typhoon preparation boils down to three things: (1) checking the contents of your insurance, (2) preparing to make records, and (3) studying the systems in advance. For the full picture of public support, see our article on support programs and tax relief for disaster victims.
Preparation 1: "Windstorm" and "flood" are separate coverages — spend just 5 minutes on your policy
Under fire insurance, typhoon damage is mainly split into two coverages. They are separate, and policies carrying only one of them are not uncommon.
| Coverage | Examples of covered damage | Points to note |
|---|---|---|
| Windstorm (wind, hail, snow) | Roof tiles blown off by strong wind, windows broken by flying debris, a damaged carport | Included in the basic coverage of most policies, but a deductible (your out-of-pocket amount) may be set |
| Flood | Above-floor flooding from river overflow or torrential rain, landslides | It may have been removed from your policy (plans that drop it to save premiums are available). Payment is subject to conditions |
Flood coverage generally comes with payment conditions like the following (they vary by product).
- Damage from above-floor flooding, or from flooding exceeding 45cm above ground level
- Damage of 30% or more of the replacement cost of the building or household goods
Put the other way around, shallow below-floor flooding is often not covered even if you have flood coverage. Also, under a "building only" policy, submerged furniture and appliances (household goods) are not covered. These are the four things to check.
Four things to check on your insurance policy or mutual aid certificate now
- Whether flood coverage is included (especially important if the hazard map places you in a flood inundation zone or landslide warning zone)
- Whether the coverage is building only, or includes household goods
- How much the windstorm deductible is (e.g., 50,000 yen out of pocket)
- Where the insurer's or mutual aid's accident reporting contact is (phone or app)
Conversely, if your flood risk is low — an upper floor of a condominium, for example — dropping flood coverage to lower the premium is also a valid choice. What matters is preventing "it was removed without my knowing." Note that a flooded car is a matter for the vehicle coverage of auto insurance, not fire insurance. It is reassuring to check that coverage at the same time.
Preparation 2: Photo records — the iron rule is "shoot before you clean up"
In every post-disaster procedure — insurance claims, the disaster victim certificate, tax relief — photos are the central evidence proving the damage. In reality, however, there is no end of cases where people finish cleaning and repairs first, for hygiene or to rebuild daily life quickly, and then can no longer prove the damage.
- Shoot the whole building from four directions (so it is clear which building was damaged)
- If flooded, shoot so that the depth is visible (place a tape measure or a person in the frame and record the waterline on outer walls and indoors)
- Shoot close-ups of each damaged spot (roof, windows, walls, floors — down to the model numbers of submerged appliances and furniture)
- If you make repairs, keep the receipts and estimates (they become evidence for insurance claims and for the "disaster-related expenditures" of the casualty loss deduction described below)
The disaster victim certificate, issued by your municipality, certifies the degree of damage (total destruction, half destruction, partial-half destruction, partial damage, etc.) under the Disaster Countermeasures Basic Act, and is the gateway to public support and to reductions of taxes and premiums. When damage is relatively light, many municipalities use a "self-assessment method" that skips the on-site survey and issues the certificate based on photos — another place where pre-cleanup photos pay off. Note that the certificate is normally not required for the insurance claim itself (the insurer verifies the damage independently), and the right to claim is subject to a 3-year statute of limitations (Insurance Act, Article 95). Trouble with predatory claim-support businesses — posing as repair contractors, pitching "free repairs paid by insurance" and charging steep fees — is on the rise, so always contact your insurance company or agent yourself to file a claim.
Preparation 3: Tax relief comes in two forms — the casualty loss deduction vs. the Disaster Exemption Act
When your home or household goods are damaged, income tax relief comes in two forms — the casualty loss deduction (National Tax Agency Tax Answer No. 1110) and the Disaster Exemption Act (No. 1902) — and you choose whichever is more favorable. The mechanisms are completely different, so grasp the differences first.
| Item | Casualty loss deduction | Disaster Exemption Act |
|---|---|---|
| Mechanism | An income deduction that subtracts the loss from your income | Reduces or waives the income tax itself for that year |
| Scope | Losses to everyday-life assets from disaster, theft or embezzlement (fraud and extortion are excluded) | When disaster damage to home and household goods is one half or more of their market value |
| Income limit | None | Total income for the year of 10 million yen or less |
| Size of relief | Deduction = the larger of (1) or (2) (1) Net loss − total income etc. × 10% (2) Disaster-related expenditures − 50,000 yen | Income up to 5 million yen: full waiver Over 5 million up to 7.5 million yen: one-half reduction Over 7.5 million up to 10 million yen: one-quarter reduction |
| Unused amount | Can be carried forward for 3 years (5 years for specified extraordinary disasters) | No carryforward (that year only) |
| Resident tax | Also deducted in the resident tax calculation | Income tax only (for resident tax, apply separately for your municipality's ordinance-based reduction) |
Comparing with numbers: income 4 million yen, loss 3.3 million yen
Assumptions: Total income etc. of 4 million yen. A typhoon causes 5 million yen of damage to home and household goods (at market value), cleanup costs (disaster-related expenditures) of 300,000 yen, and 2 million yen of insurance money is received.
Casualty loss deduction: Net loss = 5,000,000 + 300,000 − 2,000,000 = 3,300,000 yen
(1) 3,300,000 − 4,000,000 × 10% = 2,900,000 yen (2) 300,000 − 50,000 = 250,000 yen → the larger amount, 2,900,000 yen, is deducted from income. Both income tax and resident tax drop substantially, and any unused amount carries forward for the next 3 years.
Disaster Exemption Act: If the 3.3 million yen loss is one half or more of the market value of home and household goods, and income is 4 million yen (5 million or less), that year's income tax is fully waived. However, resident tax is unchanged and there is no carryforward to the next year.
Rough guidelines for choosing are as follows.
- The loss is very large relative to income (cannot be fully deducted) → the casualty loss deduction, which carries forward, tends to be more favorable
- Income of 5 million yen or less and a loss of half or more of market value → full income tax waiver under the Disaster Exemption Act. However, once resident tax is included, the casualty loss deduction can win, so running both calculations is the safest course
- Income over 10 million yen, or a loss under half of market value → your only option is the casualty loss deduction
Neither is available through year-end adjustment; a tax return (kakutei shinkoku) is required (the same as the medical expense deduction in this respect). For calculating the loss amount, the National Tax Agency provides simplified methods (based on the acquisition cost or floor area of the home and household goods), and the tax office will guide you through them if you ask. For the tax system on the supporting side — donations to victims and the donation deduction — see our article on relief donations and the donation deduction.
Filing and payment themselves can also be "extended, deferred or reduced"
Right after a disaster, filing and paying taxes is the last thing on your mind. The system itself has mechanisms built on that premise.
| Program | What it does | Contact |
|---|---|---|
| Extension of filing and payment deadlines (national taxes) | There is "regional designation," where the National Tax Agency designates an area for a blanket extension, and "individual designation" upon application. Individual designation extends deadlines by up to 2 months from the day the disaster ended (Tax Answer No. 8001) | Tax office |
| Deferral of tax payment (national taxes) | When a disaster causes substantial loss to your assets, payment can be deferred upon application, in principle for up to 1 year | Tax office |
| Reduction of estimated tax prepayments / deferral of withholding | Application to reduce estimated tax prepayments for the year of the disaster; deferral or refund of withheld income tax on salary and the like (Tax Answer No. 8004) | Tax office (withholding procedures go through your employer) |
| Reduction of local taxes | Resident tax, fixed asset tax, National Health Insurance premiums and more can be reduced by ordinance according to the degree of damage. A disaster victim certificate is generally required for the application, and deadlines (such as by the payment due date) vary by municipality | Municipality |
The point is that none of these start unless you apply. Precisely when a disaster has strained your household budget, knowing that "extension, deferral and reduction are options" is what makes the difference. You can check the year's tax deadlines in our tax calendar.
What to do today
What to do today
- Open your fire insurance or mutual aid policy (or its app) and check three things: whether flood coverage is included, whether household goods are covered, and the windstorm deductible
- Save the insurer's or mutual aid's accident reporting contact in your phone, and photograph the exterior of your home from four directions plus each room, preserving a record of its "pre-disaster condition"
- Check your home's flood inundation and landslide risk on your municipality's hazard map (useful material for deciding whether you need flood coverage)
FAQ
Q. Does fire insurance pay for below-floor flooding?
A. Often it does not. Flood coverage generally has payment conditions such as "above-floor flooding," "flooding exceeding 45cm above ground level" or "damage of 30% or more of replacement cost," and shallow below-floor flooding does not meet them. Conditions vary by product, though, so check with your insurer first. On the tax side, damage and cleanup costs from below-floor flooding can still qualify for the casualty loss deduction.
Q. Casualty loss deduction or Disaster Exemption Act — which should I choose in the end?
A. If you meet the requirements for both, you can choose whichever is more favorable. As a rule of thumb: with income of 5 million yen or less and damage of half or more of the market value of home and household goods, the Disaster Exemption Act (full income tax waiver); if the loss is larger still and you want to carry it forward to later years, or you also want to lower resident tax, the casualty loss deduction. In borderline cases, run both calculations or consult the tax office or a tax accountant.
Q. Can I not receive insurance money without a disaster victim certificate?
A. You can. The certificate is normally not required to claim insurance money; the insurer verifies the damage independently. The certificate becomes necessary when applying for public support such as livelihood reconstruction support grants, or for reductions of local taxes and premiums. It is issued by your municipality, and for minor damage it may be issued by a photo-based self-assessment method.
Q. My car was flooded in a typhoon. Does fire insurance cover it?
A. Cars are not included in the household goods of fire insurance; they belong to the vehicle coverage of auto insurance. Flooding from typhoons and floods is generally covered by vehicle coverage (earthquake, eruption and tsunami are excluded in principle), but it depends on your contract type, so check with your insurer. Losses not compensated by vehicle coverage may be included in the casualty loss deduction calculation (limited to assets ordinarily necessary for daily life, such as a commuting car).
References (sources)
* This article is general information based on the systems as of August 2026. Fire insurance and mutual aid coverage and payment conditions depend on your contract, and local tax reductions depend on your municipality. For individual decisions, consult your insurer or mutual aid, the tax office or a tax accountant, and your municipality.