Nuclear Is Not Covered by Your Home Insurance Policy
A recent article published in Insurance Journal recounts the story of activists intending to sue the owner of a nuclear power plant. These activists are pursuing their claim on the basis of environmental grounds and what they believe is best for the local environment. As a homeowner, you should be concerned about any potential nuclear activity near your home as it presents risks beyond potential environmental issues regardless of where you live – Oklahoma City, Omaha, Phoenix, Portland, Raleigh. Due to the rather severe effects of any nuclear activity, most home insurance policies will exclude any related damage, which can be significant uninsured exposure.
The standard home insurance policy excludes damage to your home or property as a result of nuclear hazards which are broadly defined as any nuclear reaction, radiation, or radioactive contamination. This should be of concern to you in that it’s most likely not an exposure you create yourself and, thus, can potentially avoid. If a peril of loss is based on an activity that you engage in, you can simply choose to avoid the activity to insulate yourself from an uncovered loss. Unfortunately, most nuclear issues are the function of activities undertaken by others that you cannot directly control. These activities, in turn, can cause damage to your home and you will not be insured for them.
The nuclear exclusion even goes on to state that fire, explosion, or smoke (which are usually covered perils) are not covered if they are the form in which the nuclear hazard takes place. However, if the nuclear hazard takes some other form and then causes a fire to your home, that fire would be covered. This can be confusing to understand and sometimes difficult to determine when it actually occurs.
Another exclusion on your home insurance policy is that for damage caused by war or warlike acts. Included in the war exclusion is damage caused by any discharge of a nuclear weapon, even if the discharge was accidental. This should be of concern if you reside in areas near the storage of such weapons or military activities that use the weapons. While a discharge can be completely inadvertent and certainly not anything of your doing, resulting damage to your home would not be covered by your home insurance policy.
While you may consider the possibility of pursuing a claim against the responsible party for causing nuclear-related incident, such claims can be difficult and costly to pursue. In the meantime, you are left with damage to your home and no insurance to reimburse you. This illustrates the benefit of first-party property coverage versus the challenge of seeking recovery from third party liability policies.
Instead of feeling powerless in such situations, you should consider taking a more active role in understanding the potential nuclear exposure around your home. Are there nuclear power plants or other facilities that use nuclear power? Are there nuclear activities undertaken by the military near you? If the public is allowed to weigh in on the approval of such activities, consider the impact on your home and make your decision once you have all the facts.