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Most Japan earthquake damage not insured

Most Japan earthquake damage not insured

KASHIWAZAKI, Japan--Insurers will pay only a small portion of billions of dollars in losses from the deadly earthquake that struck Japan earlier this month.

The 6.8-magnitude quake was responsible for at least 11 deaths, around 1,800 injuries and as much as 1.5 trillion yen ($12.4 billion) in property damage and economic losses, according to figures released by government officials in Niigata prefecture, where most of the damage was located.

Insurers are expected to pay claims amounting to around $168 million, according to catastrophe modeler Risk Management Solutions Inc. of Newark, Calif. The modeling company said the insured damage is expected to total about one-third of those from a 2004 earthquake that struck the region.

The recent quake damaged or destroyed more than 12,000 buildings, which translated into losses of around 200 billion yen ($1.65 billion), according to the prefecture.

At least one large commercial loss is uninsured: Tokyo Electric Power Co.'s Kashiwazaki Kariha nuclear power plant was heavily damaged by a fire that was started by the temblor and remained shut down last week. The prefecture said damage to the facility is expected to amount to around 700 billion yen ($5.8 billion).

A TEPCO spokesman in Tokyo would not confirm the prefecture's damage estimate, saying the utility will release its own estimate soon. He said TEPCO has no insurance coverage in place to respond to the damage and will fund the loss itself.

The quake uncovered some problems in the power plant's crisis response plan, according to Japan's Nuclear & Industrial Safety Agency.

"There were several human errors," said Hisanori Nei, NISA's director. Among them was a slow response by personnel at the facility to report the leakage of water containing radioactive materials, he said.

The quake caused water pipes used in the plant's fire protection system to break. Water from the pipes washed into an area containing radioactive material and carried a small amount of the material out to sea, Mr. Nei said. The amount of material released was not found to be hazardous or to have caused environmental damage.

There was a delay in reporting the leak, a TEPCO spokesman confirmed. He said, however, that personnel at the plant did react properly, albeit slowly, in alerting authorities. "Basically they did the right thing," he said.

TEPCO acknowledged in response to questions from NISA that there was an absence of technical personnel to measure radiation in the water leak because those staffers left when an evacuation order was given. That problem is being evaluated and TEPCO will establish a system whereby radiation can be measured in such situations, the utility said in a statement.

The utility also said it will better prepare its in-house firefighting team to respond to fires at the plant and will consider establishing a hotline communications system with the local fire department.

Mr. Nei said NISA will investigate the incident and could recommend other safety-related changes at the plant.

The International Atomic Energy Agency is sending a team to examine the damage in the hope of "identifying lessons learned that might have implications for the international nuclear safety regime," the agency said in a statement.