Nuclear Meltdown: Will Your Homeowners Insurance Protect You From Radiation Damage?

Last Updated Apr 26, 2011 4:40 PM EDT

The earthquake and resulting tsunami that rocked Japan earlier this month continues to wreak havoc on the world's third largest economic power.

In addition to a humanitarian crisis that has cost at least 10,000 (and maybe as many as 20,000) people their lives, Japan's government has yet to begin coping with an estimated $235 billion in infrastructure damages.

One reason for that is the continued instability of the Fukushima nuclear reactor, situated just to the north of Tokyo.

Those of us with long memories may recall the former Soviet Union's Chernobyl explosion of 1986, which caused hundreds of deaths and left the surrounding town uninhabitable. A little closer to home, the Three Mile Island accident near Harrisburg, Pennsylvania in 1979 produced cleanup efforts that were not fully concluded until 1993, and cost approximately $1 billion.

The recent spike in "nuclear radiation" and "nuclear meltdown" Google searches reflect popular concern that another reactor malfunction Stateside could result in a profound loss of life, property and security.

Here's a question: Does your homeowners insurance or renters insurance policy covered you in the event of a nuclear meltdown?

Consider this:

  • Standard homeowners insurance and renters insurance policies exclude damages due to a nuclear meltdown or radiation leak. If you're thinking your homeowners or renters' policy will protect you, you're out of luck. Americans cannot purchase coverage for this type of catastrophic event from any vendor, according to the Insurance Information Institute. On the other hand ...
  • The Price-Anderson Act of 1957 might provide at least some financial protection. According to the American Nuclear Society, Section 170 of the Atomic Energy Act created a fund and required all Nuclear Regulatory Commission licensees and Department of Energy Contractors to contribute to it. The fund, which currently has about $12 billion in it, is supposed "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. The Act provides 'omnibus' coverage, that is, the same protection available for a covered licensee or contractor extends through indemnification to any persons who may be legally liable, regardless of their identity or relationship to the licensed activity. Because the Act channels the obligation to pay compensation for damages, a claimant need not sue several parties but can bring its claim to the licensee or contractor," according to the American Nuclear Society website.
  • The latest revision of the Price-Anderson Act was extended through 2025. The revision was enacted through the "Energy Policy Act of 2005."
The biggest problem with the fund, as I see it, is that there is only $12 billion in it. Through November, 2005, (the first 43 years of Price-Anderson protection), the "nuclear insurance pools have paid a total of $151 million for claims. The Department of Energy has paid about $65 million during this same period."

That isn't much. It makes $12 billion seem like all the money in the world.

Except the Japan is now facing a bill of more than $235 billion, which admittedly includes damage caused by the earthquake and tsunami, not just radiation.

Still, given the size of the U.S. compared with Japan, $12 billion could seem like a drop in the bucket should a nuclear event the size of Japan's happen on our shores.

What do you think? Is a $12 billion pool of insurance money enough to cover nuclear radiation claims?

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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at and The Equifax Personal Finance Blog, and is Chief Content Strategist at, a community for real estate investors.
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    Ilyce R. Glink is an award-winning, nationally-syndicated columnist, best-selling book author and founder of Best Money Moves, an employee benefit program that helps reduce financial stress. She also owns, where readers can find real estate and personal finance resources.