Do We Need Nuclear Insurance?

Weeks after an earthquake and subsequent tsunami devastated Japan, many feared not only that the country wouldn’t be able to rebuild, but that it could succumb to a new threat: radiation caused by reactor damage at the Fukushima Daiichi Nuclear Power Plant.

But concerns about radiation exposure did not stop in Japan. Discussions of exposure threats surfaced as far away as the United States. Many began to wonder what could happen if people or their property were ever seriously exposed to radiation. Would our home insurance policies protect us or is there some type of nuclear insurance out there to help?

Nuclear Radiation Isn’t a New Threat

While the fear of radiation heightened recently as a result of the plant issues in Japan, this issue isn’t entirely new. On April 26, 1986, nuclear radiation severely impacted Chernobyl in Ukraine after operators in the control room of Reactor #4 botched a routine safety test. The mistake resulted in an explosion and fire that burned for 10 days.

The radioactive fallout spread over tens of thousands of square miles and forced over 250,000 people to permanently vacate their residences. This is known as the worst nuclear disaster to date.

In the United States, we suffered our own nuclear scare near Harrisburg, Pa. in 1979. Known as the Three Mile Island accident, the disaster was a result of a partial core meltdown in Unit 2 of the Three Mile Island Nuclear Generating Station.

Making history as the most significant nuclear power plant accident in U.S. history, the radiation gases caused no injuries but resulted in damage that cost approximately $1 billion and took nearly 15 years to clean up.

The Effects of Radiation on Health and Home

It’s clear that nuclear explosions and radiation can have a very damaging effect on both health and property. The human body naturally has a mechanism that protects itself from cell damage due to radiation from hazardous chemicals; however, it can’t withstand high levels of radiation.

Aside from the obvious effect that a nuclear explosion could have on the human body, some long-term effects from radiation could include low blood pressure, hair loss, premature aging, cancer, genetic mutation and nervous system/reproductive disorders.

As for your home, an explosion could obviously cause major destruction to your property. However, when it comes to radiation, damage potential is not quite as clear since, according to United States Nuclear Regulatory Commission (NRC), many structures can withstand the effects of the radiation itself.

On the other hand, nuclear radiation is known to have an impact on electronics. Specifically, radiation from nuclear exposure is said to enhance photocurrents and cause thermo-mechanical shock to semiconductors known as the electromagnetic pulse (EMP) effect. As a result of this effect, radiation can cause an electromagnetic device to cease signal transmission within its contents.

Is Insurance Available to Protect Us?

Of course, if you become sick or injured by a blast or radiation, your health insurance should be able to assist with at least some medical costs. But currently, there is no nuclear insurance available to purchase for a home—and unfortunately, nuclear explosions and radiation are not among the items that homeowners insurance covers.

If you’ve heard of the terms nuclear liability insurance and nuclear electric insurance, you may be wondering why you can’t just purchase them. This is because they are coverage options for nuclear facilities.

The Price-Anderson Act of 1957 requires nuclear facilities to purchase the liability insurance to cover costs associated with bodily injury and property damage to its employees or the public. And the electric insurance is purchased to cover interruptions, damages and decontaminations from nuclear issues.

So since you can’t purchase nuclear coverage as a homeowner or renter, what’s out there to assist you?

  • Nuclear compensation fund: The nuclear liability insurance listed above requires all nuclear facilities to contribute to a nuclear compensation fund under Section 170 of the Atomic Energy Act. The fund currently has about $12 billion in it that is meant to “provide prompt and orderly compensation of members of the public who incur damages from a nuclear or radiological incident no matter who might be liable.”
  • Disaster relief: According to the NRC, disaster relief is also available to state and local governments under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. If a nuclear accident is declared an emergency or major disaster by the President, accident victims are provided 25 percent of the cost of temporary housing for up to 18 months, home repair, temporary mortgage or rental payments and other “unmet needs” by the government.

Some worry that damage from an explosion or radiation could easily drain the nuclear compensation fund, while the disaster relief subsidy may not provide enough assistance by only offering 25 percent. But since there are no discussions of nuclear insurance becoming available in the near future, homeowners may have to rely on what’s available if ever faced with a nuclear disaster.