In the late 1800s and early 1900s, coal mining was a booming industry in the United States, and there were thousands of active mines covering millions of square miles of land across the country. When the mines were depleted of coal, they were often filled in or simply abandoned. Today, millions of Americans live in homes that were built over the top of these old mines. If you suspect that your home is built over a mine, you may have questions about mine subsidence insurance.
Mine subsidence insurance, when available, is usually handled by state governments, though there are some exceptions. If your state does not provide it, you may still be able to obtain coverage - just make sure you have an independent agent to talk to about getting protection.
Mine subsidence is lateral or vertical ground movement resulting from the collapse of a mine below. This can occur when pillars upholding the structure collapse or when mine roofs erode. Mines can collapse as long as 100 years after they have been abandoned. Mine subsidence is a term that describes this collapse that causes the ground above to sink. It can lead to everything from minor shifts in the earth’s surface to large sinkholes.
When the earth shifts under a home, it can cause cracks in the foundation, or minor settling issues. In worst cases, large sinkholes can cause the collapse of an entire house. Fortunately, these instances are rare.
Damages to your home’s structure can lead to costly repairs. To get an idea of the potential price tag, in 2010, Indiana paid out compensation on eight mine subsidence claims that totaled more than $590,000; an average of nearly $74,000 per claim.
Mine subsidence insurance is available only in states that offer it. These states currently include Colorado, Illinois, Indiana, Kentucky, Ohio, Oklahoma, Pennsylvania, West Virginia and Wyoming. If you live in one of these states, you can consult a map that details the location of old mines in order to determine whether your house is at risk. If you are at risk for ground movement, you can purchase a policy; however, residents of Colorado living in homes built after 1997 are not eligible for coverage.
If your home is above an old mine and you do not live in one of the above mentioned states, you may be able to add mine subsidence to your home insurance policy under named-risk coverage. Homeowners policies don't typically provide this coverage, however. Check with your insurance company to see if this coverage is available to you.
Because these policies are provided by state governments, the coverage they offer varies. While most states allow coverage for the building’s structure, other states, such as Pennsylvania, include coverage for damage to outlying structures like sheds, detached garages, fences and in-ground swimming pools in their policies.
For the most part, mine subsidence insurance covers damages only to the structure of your home. The contents within should be covered by your homeowners policy. If you live in a condo that is in a high-risk area, you may want to ensure that your condo association’s master plan includes mine subsidence insurance.
States also control how the maximum amount of coverage you can buy. While Illinois enables residents to purchase up to $750,000 in mine subsidence coverage, West Virginia sets its maximum coverage at only $75,000 per structure.
In some states, residents of at-risk counties are required have mine subsidence insurance. In most states that offer this coverage, policies are optional. Surprisingly, despite the relatively low cost of premiums, fewer than 10% of at-risk residents in these states purchase policies. Some are not even aware that mine subsidence coverage is available.
The cost of mine subsidence insurance, like the coverage offered, varies according to the states that provide it. Even the most expensive policies are rather inexpensive, however. By far, the lowest rates for this insurance can be found in Ohio, where residents can purchase a mandatory policy that insures them up to $300,000 for a mere $1 per year. However, mine subsidence insurance in Ohio is limited only to 1 to 4 family dwellings.
In other states, rates vary; but to get an idea of costs, $100,000 in coverage will cost you about $50 to $100 annually. In Illinois, where the highest coverage limits can be found, a $750,000 policy can be purchased for $206 per year. In many cases, rate schedules are published online.
Because mine subsidence insurance is state-provided, each state will have its own method for applying for and purchasing it. Depending on where you live, you may be able to purchase it directly through your state’s government website, while other states will require you to purchase it through an insurance carrier that is an approved member of the Mine Subsidence Insurance Underwriting Association (MSIUA).