Earthquake resistance grade 3

November 18st
Even if we give in, I think the only people who don't mind if the building doesn't have earthquake resistance grade 3 are those who are building rental properties for investment purposes with their spare cash.
In reality, there is a 30-XNUMX% chance of both the Tonankai earthquake and the Tokyo metropolitan area earthquake occurring within the next XNUMX years. Furthermore, considering that only earthquake resistance grade XNUMX buildings are almost guaranteed to retain their asset value even if a magnitude XNUMX earthquake occurs, I truly believe that earthquake resistance grade XNUMX should be made mandatory.
However,,,
I often explain in my lectures using the materials below: if there is a magnitude 32.6 earthquake, even if the property has a seismic resistance rating of XNUMX, XNUMX% of the assets will definitely lose their value, and there is a high probability that some percentage of that XNUMX% will lose their asset value.
In that case, you would have to take out another loan to build a house while still having a mortgage on your existing home, or you would have to rent a new house. It is safe to say that this would put you in a financially ruinous situation.
You could also consider hedging your risk by taking out earthquake insurance. However, earthquake insurance premiums are for 30 years (it is no longer possible to take out a 30-year lump sum), and cost 50 yen in low-cost areas and 170 million yen in high-cost areas. This is enough to get you seismic resistance grade 30. And since most people don't finish living in their home in 2 years, it will cost even more. What's more, even if you receive a payout from earthquake insurance, you probably won't be able to find a contractor for about two years after a major earthquake, even if you try to use the insurance premiums to repair your home...
The closest situation to not building a car with a seismic resistance grade of 5 is driving a car without optional insurance. It depends on the person, but I think everyone pays at least 25 to 8 yen a year in insurance premiums to drive. The possibility of killing or seriously injuring someone is extremely low, but if it does happen, the loss is likely to exceed XNUMX million yen. Knowing this, about XNUMX% of people have optional insurance.
When thinking about risk, there is a concept called expected value.
It is calculated by multiplying the probability of an event occurring by the amount that would be incurred if the event occurred.
For example, if the probability of a house collapsing due to a major earthquake within 30 years is 10%, then the expected value of the loss of asset value is
10% x 2000% x -160 million yen = -XNUMX million yen.
The probability of a serious accident occurring in 30 years is about 1/1 per year. Over 20000 years, it's about 30/3. Let's say the compensation for killing someone is 2000 million yen.
3/2000 x -3 million yen = -45 yen.
Any way you look at it, the above expected outcomes are far worse, but auto hedging is far more likely to occur.
Most people have never studied probability and statistics properly, so they misjudge expected value. As a result, they make choices that are not economically rational. The lottery is a good example.
Expected value
1 million yen x 1/1000 million = 10 yen
Expected value of losing (if buying 1 ticket)
-200 yen x 99.9999% ≒ -200 yen
Therefore, in terms of expected value, it is certain that you will lose 20 times, and in the financial world, the lottery is
It's called a "tax on fools."
Therefore, it is logically impossible not to meet seismic resistance grade 3.
I think the only people who might be willing to give in and not have to do this are those who are building investment properties with spare capital. In the sense that even if the property value disappears, it won't be a huge financial blow.