The news of excessive radiation from a damaged nuclear plant in Japan has scared the pants off of many Americans – and prompted a run on iodine pills in California.
It’s difficult to imagine leaving your home and belongings because they were damaged by radiation. And yet, that could be what happens to thousands of Japanese who live near the damaged nuclear plant.
Watching this has terrified many U.S. residents: Many homeowners are wondering if their homeowners’ insurance policy will protect them in the event of a nuclear accident.
Unfortunately, it won’t. Homeowners’ insurance policies exclude damage caused by a nuclear accident or “event.” However, it may surprise you to learn there are some financial protections for both homeowners and renters that were created by a law that has been on the books since 1957.
The Price-Anderson Nuclear Industries Indemnity Act (commonly called the Price-Anderson Act) is a United States federal law, first passed in 1957 and since renewed several times, which governs liability-related issues for all non-military nuclear facilities constructed in the United States before 2026.
The Price-Anderson act was proposed by the Federal government as a way to encourage companies to pursue nuclear power as a resource by limiting possible liability.
Companies were afraid of taking on excess liability, especially after WWII (ironically, the bombings in Japan) and the inception of the atomic age. People were scared by the very thought of radiation. Government wanted companies to research how nuclear power might be harnessed to supply energy to U.S. residents, so they eliminated at least a portion of any future liability.
In a way, the Price-Anderson act works similarly to the FDIC insurance fund. Businesses that are involved with nuclear energy pay premiums every year that go into a giant fund. If something was to happen, and radiation was to contaminate an area of the U.S., nuclear power plant operators have contributed $12 billion into a giant pool which would be used for the claims.
It is worth noting that the Act protects all Americans, even renters, not just homeowners and provides comprehensive, “reasonable” coverage of the following in the event of a nuclear power plant malfunction: Bodily injury; sickness, disease or resulting death; property damage and loss; and reasonable living expenses for individuals evacuated from their homes.
That’s why insurance companies don’t have to deal with covering damage caused by nuclear accidents, says Chris Kissell, a spokesperson for Insurance.com.
Are Americans in danger of a Level 5 radiation leak like in Japan or Chernobyl? What about an even bigger accident? Kissell says there only a small chance of a grave problem.
“With more modern U.S. facilities, this is not a real danger. Some of the [nuclear plants] which go back 30 years or more could be a problem,” he said.
And yet, he acknowledges Americans are nervous. “It’s just human nature that when something happens, people wonder how it could affect them. And these things are often beyond government control. I think out in California where you have [nuclear] plants and earthquakes, people are more concerned,” he explained.
“People realize there are a lot of safeguards but they want to know how they’re being kept safe,” he added.
For more information about the Price-Anderson Act, go to the American Nuclear Society website.