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Home insurance for nuclear accidents

The recent events in Japan have certainly thrown in some new fuel to the nuclear safety polemics in the world. The debate over the environmental hazards and potential devastating effects of nuclear plant energy have been very pronounced well since the Chernobyl catastrophe back in 1986. And now people are definitely more hysteric about the topic, proposing new regulations for atomic fuel energy and imposing bans on it for the sake of avoiding the situation Japan has ended up in.

In the global informational society we live in these days it's not a big surprise to see many Americans being worried about the insurance of their homes against nuclear disasters in the light of recent events. Supposing that a disastrous tsunami or earthquake could cause a meltdown at any of the American plants many people wonder if their insurance policies would cover the costs in case such an event would affect their neighborhood and make it uninhabitable for a period of time. Would there be any sense to file an insurance claim?

In fact, there's no sense at all. All standard homeowners insurance policies do not include coverage for damages caused by nuclear disasters and related events. Unless you purchase a weaver for this particular type of perils, which is available with most insurance companies. However, there's no real need to do that because even without having a home insurance policy covering you against nuclear threats you are still covered as a citizen of the US. How is this possible? Meet the Price-Anderson Act!

The Price-Anderson Act, which was passed as a law back in 1957, imposes the federal government to maintain an insurance pool for all enterprises that possess and operate nuclear reactors within the boards of the US. This pool is to be used for settling any liability claims from individuals who are affected by nuclear disasters or exposure to radiation. Here the things that the Price-Anderson Act will cover in case of an individual claim:

  • Bodily injury
  • Sickness, disease or resulting death
  • Property damage and loss
  • Living expenses if the individuals are forced to evacuate

In that sense the Price-Anderson Act provides broader coverage that typical home insurance policies and acts more like auto insurance. It not only pays for the injuries and damage to property, but also covers healthcare expenses and the value of the property affected by radiation. However, after the coverage is settled the affected property becomes the property of the nuclear reactor operator that is responsible for the incident.

Currently, the insurance pool under the Price-Anderson Act accounts for about $12 billion and is valid until Dec. 31, 2025. During the whole period of the Act being in force, the only nuclear disaster within the borders of the use has been the Three Mile Island accident in 1979 in Pennsylvania. It has resulted in $71 million being paid from the insurance pools to affected individuals who have filed claims after the accident has taken place. Let's just hope that the Price-Anderson Act won't be put in use ever again.

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