Why won`t insurance companies insure Nuclear power plants?

Question

Why don`t insurance companies insure some drivers?

Answer 1

Best Answer - Chosen by Voters

bostonianinmo is absolutely correct. Depending upon the conditions at the time of the accident, one plant could irradiate thousands of homes and/or people; the insurance company would be liable to cover every person or house that gets contaminated. Far too costly for any insurance company to cover.

Your homeowner's policy also doesn't cover things such as terrorist attacks or acts of war. Fortunately, they *do* cover things like meteor strikes...well, at least they don't rule them out.

Some drivers are too costly to cover, based on their driving history.

Answer 2

Do you have a link to support your claim?

Answer 3

Not only will they not insure the plant, they won't cover your home if an accident at a nuke plant damages your home! Read your policy. Virtually every homeowners insurance policy excludes radioactive contamination or damage due to accidental or deliberate release from ANY radioactive source.

Answer 4

Way too many unknowns to properly evaluate liability in the event of an accident. This is a big reason why the federal government has to be involved because Nuclear power is absolutely necessary for energy independence, jsut won't happen any other way.

Answer 5

There's a number of reasons. One, a lack of knowledge about nuclear accidents. It's a low freq, high severity risk but the freq is so low there's almost no data to go on about. Insurance companies only work with LOBs they know about. Two, the severity in a worst- case scenario would be so high that it would be the cat to end all cats. This would cause the insurer to place restrictions such as a time- limit on loss development (since people would get sick and sue 20 years later) and the losses outside those restrictions would probably be high enough that it wouldn't even make sense for the plant to buy the insurance. In short, insurance companies don't like insuring a bunch of risks with infintesimal freqs but infinitely high severities, especially when dealing with technologies they know nothing about.

Answer 6

Insurance companies won't insure nuclear power plants because there is a Federal Law called the Price-Anderson Act which places liability for damages above $10 billion for a nuclear accident on the Federal Government. The first $10 billion is covered by a fund maintained by the nuclear industry.

There is a perception that a nuclear accident could have ridiculously huge consequences that no insurance company would be crazy enough to volunteer for. This perception is re-inforced by some poorly thought-out reports issued by our own government and even more propaganda written by anti-nuclear special interest groups.

This perception is not supported by a rational look at the physics and chemistry associated with nuclear power plants, but it has led to a lot of fear on the part of poorly informed folks. Fear makes people avoid risks with unknown consequences. Therefore, the Federal Government stepped in way back in 1957 and assumed the risk for everybody.

Insurance companies won't insure some drivers because they believe that some drivers aren't worth insuring. The insurance business exists to make money. If a person pays $1000 per year for car insurance but regularly has $5000 worth of claims, then the insurance company isn't making any money from them. Therefore, the company will drop that person's insurance policy. This is legal because an insurance company has no obligation to insure a high risk individual.