Home insurance meltdown: Is nuclear radiation covered?

By Michele Lerner Posted : 03/16/2011

Home insurance radiationAn anxious world continues to wait and worry as Japan tries to fend off meltdowns at nuclear power plants that failed in the wake of a massive earthquake and tsunami. 

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If a similar disaster were to strike the United States and your home became uninhabitable for a brief time – or forever – due to radiation, would your home insurance cover the claim?

Actually, it wouldn't. 

 “All standard home insurance policies exclude damages due to a nuclear accident because of the catastrophic nature of that type of accident,” says Don Griffin, vice president of personal lines for the Property Casualty Insurers Association of America.

But that doesn't mean you'd be left in the lurch.  The Price-Anderson Act, passed into law in 1957, guarantees you would be made whole.

"The federal government created a pool that includes all the companies that own nuclear reactors," Griffin says. "The insurance pool will pay for any claims associated with an accident.”

Griffin says everyone in the United States is covered under this liability insurance policy.

Nuclear insurance: the Price-Anderson Act

The Price-Anderson Act ensures funds will be available to cover claims from individuals for personal injury and personal property damage that result from an accident involving a commercial nuclear power plant.

According to the Nuclear Regulatory Commission (NRC), Insurance under Price-Anderson covers:

  • Bodily injury
  • Sickness, disease or resulting death
  • Property damage and loss
  • Reasonable living expenses for individuals evacuated

Griffin says this nuclear insurance offers broader coverage than home insurance.

“The liability coverage for a nuclear accident is similar to the coverage you have when you are in a car accident caused by someone else,” Griffin says. “Your property and your personal property would be covered, and, more than likely, so would health care costs.”

Griffin says that in the event that your home becomes uninhabitable due to an explosion related to the nuclear accident or due to radiation exposure, you would be reimbursed for the property and the power company would end up owning the land.

Price-Anderson became law on Sept. 2, 1957, and has been extended to Dec. 31, 2025.

Owners of nuclear power plants pay premiums into a nuclear insurance pool that currently has more than $12 billion in funds, according to the NRC.

Since the Three Mile Island nuclear power plant accident in 1979 in Pennsylvania, the nuclear accident insurance pools have paid approximately $71 million in claims and litigation costs related to the accident, according to the NRC.

Money was given to evacuated families for living expenses and individuals were also reimbursed for lost wages as result of the accident.

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