The present paper describes the progress of an IRP (Integrated Research Project) to evaluate a modified Zircaloy LWR (Light Water Reactor) cladding to improve accident tolerance of LWR fuels. Nuclear fuel pin cladding failure is a major problem in reactor off-normal operational events. This paper presents the results of reactor system neutronics analysis when coating is applied to the surface of the fuel cladding. Various materials are tested as coatings for the modified cladding with 100 micron coating thickness. Some of these materials are expected to prevent or delay the reaction of brittle exothermic oxide formation during steam exposure at increased fuel temperature. These materials are evaluated by their effects on the neutronics requirements of LWR fuel, as well as on the Doppler temperature and moderator void (density) coefficients. Despite only 100 micron coating thickness, some materials are found to have significant negative effect of reactivity of LWR fuel assemblies. In addition, Doppler, moderator temperature and void coefficients are unaffected by most of the coatings, except for some very neutron absorbing materials. This research is used to select materials for the next phase of IRP project, which involves cladding performance testing, and experimental and computational evaluation under normal and off-normal conditions.