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March 26, 2011

Most Americans would be shocked to find that in the event of a major nuclear accident at a U.S. nuclear power plant, even in a large catastrophe like Chernobyl in Ukraine, the plant owner is only liable for a tiny fraction of damages that could occur.

The Price-Anderson Act of 1957 was to encourage commercial development of nuclear power by placing a cap on the amount of liability for each nuclear plant licensee in the event of a nuclear accident. Each licensee is required to pay into an insurance pool, currently at about 12.6 billion, which is to ensure adequate funds to satisfy liability claims of the public for personal injury and property damage in the event of an accident at one of the plants.

“Under existing policy, owners of nuclear power plants pay a premium each year for $375 million in private insurance for offsite liability coverage for each reactor unit,” says the U.S. Nuclear Regulatory Commission (NRC) website. “This primary, or first tier, insurance is supplemented by a second tier. In the event a nuclear accident causes damages in excess of $375 million, each licensee would be assessed a prorated share of the excess up to $111.9 million. With 104 reactors currently licensed to operate, this secondary tier of funds contains about $12.6 billion.”

When you consider that nuclear power plants are located near some of this country’s largest cities, including New York City, Philadelphia, Washington D.C., Chicago and Miami, how much would it cost in personal injury and property damage if a major nuclear accident occurred?

According to an article by CNN Money, a 1982 study for the NRC found that a nuclear meltdown could potentially cause 50,000 fatalities and $314 billion (equaling $720 billion today) in property damage.

AOL News reports that a 2009 study by professors at the Risk Management and Decision Processes Center at the University of Pennsylvania’s Wharton School called “Environment & Energy: Catastrophic Liabilities” hypothesized what would happen if a meltdown occurred at Indian Point Energy Center in Westchester County, NY. The study concluded that 64,000 people would eventually die resulting from the incident. They estimated that claims from surviving families would be about $384 billion and that economic losses would be between $50 billion and $100 billion.

25 years since the disaster at the Chernobyl Nuclear Power Plant in what is now Ukraine, cities and villages contaminated with radiation within a 60-mile radius of the plant remain ghost towns, residency and business prohibited due to radiation levels that will linger for hundreds of years. Many people evacuated immediately after the accident, told they would be back home in just a few days, have never been allowed to return.

If a nuclear disaster should occur at a U.S. nuclear power plant and the 12.6 billion insurance fund is insufficient to cover the claims of bodily injury, sickness, disease or resulting death, property damage and loss as well as reasonable living expenses for individuals evacuated, the government and taxpayers would likely be left to pay the rest.

All property and liability insurance policies issued in the U.S. exclude nuclear accidents.

Since the nuclear accident at Three Mile Island in 1979, the insurance fund established by the Price-Anderson Act has paid out $71 million in claims and litigation costs associated with the accident.

Find out how close you live or work to a nuclear power plant with CNN Money’s tool.


  1. Gravatar for The Rad Rider

    No one likes an alarmist without cause, however, there appears to be ample cause for alarm.

    Study the close up views of the #3 reactor explosion and you will see that the blast was not the type of explosion one would expect from the ignition of hydrogen. The fireball seen in the corner of the plant may have been due to hydrogen but it was much too small to cause the main blast. Not only that, inspection reveals that this was a directional blast. Much as if a cannon had been fired straight up from inside the reactor building.

    This is what one would expect if the reactor dome exploded with enough force to take out the removable concrete pads covering it.

    Injecting sea water into the molten core causes an immediate explosion of steam. If the temperature of the reactor vessel had reached critical temperature, it would not have had the integrity required to withstand this dramatic increase in pressure.

    If my assessment is correct, the dark colored cloud we witnessed, that was shot approximately 1,000 feet into the air, contained the MOX core and made this accident worse than Chernobyl.

    I also suspect that the #1 and #2 reactor vessels have lost their integrity due to the same process.

    The so called experts that have been downplaying the seriousness of this accident, have an agenda other than disseminating the truth. It is long past time for scientists, other than myself, to speak up and show the discrepancies in the current story.

    It is also long past time for news reporters to do the basic research required, before publishing erroneous and misleading details in their stories.

  2. Gravatar for Zeo

    I have lived in Ukraine at the time of Chernobyl accident. Official sources both here in the US and back home in Ukraine do not reveal the true extent of the event - it was and is a catastrophe comparable in scope only to a major war and in some aspects more horrible than a war. This threat does not have shape, odor or sound yet it cripples and kills children of our children of our children for many generations to come. The math in the article does not add up - take 60 mile radius of deadly radiation in the vicinity of some of this country’s largest cities, including New York City, Philadelphia, Washington D.C., Chicago and Miami and more than 50000 people will live within this radius. Take this chunk of land out of commission for several hundred years and the figure of 100 billions seems like underestimation. For those who want to know truth of what is was and is like for Ukrainians and Belorussians I recommend this book:

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