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Mine subsidence insurance is a niche insurance policy covering the damage to your home caused by a movement of land triggered by a man-made mine. Millions of homes in the U.S. are built over abandoned mines, and if your home is vulnerable to land shifts caused by these mines, the damage may not be covered by your standard homeowners insurance policy. Mine subsidence insurance rates are generally very affordable, and you should consider purchasing a policy or adding coverage to your existing homeowners insurance policy if you live in an at-risk area.
What Is Mine Subsidence?
Mine subsidence is generally defined as the movement in the ground—lateral or vertical—caused from the sinking, shifting or collapsing of man-made underground mines. The types of mines causing subsidence may include coal, clay, limestone and fluorspar mines. The risk is generally concentrated in parts of the country with large numbers of homes positioned near abandoned coal mines such as in Pennsylvania and Illinois.
Abandoned mines can have a variety of damaging effects on the integrity of the land located directly above the mines or even in the mines' surrounding area. A collapse of pillars supporting a mine roof can result in so-called sag or trough subsidence, the most common type of subsidence, in which a depression of the ground can spread over several acres. A sinking or collapsing mine can also result in pit or sinkhole subsidence, which creates a hole in the ground after a mine roof collapses.
Importantly, mine subsidence only refers to movements in the ground caused by man-made structures. If lateral or vertical ground movement is caused by an earthquake, landslides, soil erosion or some other natural phenomenon, this is not considered mine subsidence.
What Does Mine Subsidence Insurance Cover?
Mine subsidence insurance provides financial cover in the event that a sag subsidence or sinkhole subsidence damages your home. For example, if a pillar supporting a mine collapses and the earth around your home depresses, damaging parts of its foundation, mine subsidence insurance will cover that damage up to your policy limits. If you live above or near an abandoned mine, it's important to buy mine subsidence insurance coverage, as a standard homeowners insurance policy will generally exclude damage caused by this event.
Where Can You Buy Mine Subsidence Insurance?
Mine subsidence insurance is generally only offered in the states most at risk for the peril. In other words, those states with a notable number of properties established over abandoned mines. These states include Colorado, Illinois, Indiana, Kentucky, Ohio, Pennsylvania, West Virginia and Wyoming.
Given the localized nature of this risk, coverage is usually offered by state governments or by private insurers that are mandated by the state to provide coverage. Mine subsidence coverage can vary by state, but those policies provided in Pennsylvania provide a useful example. The state government of Pennsylvania supplies mine subsidence insurance with the following features.
- Policy limits: Coverage limits range from $5,000 to $500,000.
- Cost: Annual premiums are approximately $50 per $100,000 of insurance coverage.
- Appurtenances: If appurtenances—fences, patios, driveways and other permanently affixed structures—are damaged in the same mine subsidence episode that damaged the structure of your home, those losses are covered for up to 10% of your overall coverage limit.
- Policy deductible: The amount of the estimated damage the policyholder will have to cover out of pocket when making a claim. The deductible is a fixed $250 for residential structures in Pennsylvania.
- No contents coverage: In Pennsylvania and most other states' mine subsidence insurance policies, mine subsidence insurance will only cover the structure of your home, not your personal belongings.
As a contrasting example, in Illinois, another state with widespread mine subsidence, the state government does not itself offer mine subsidence insurance. Instead, it mandates that property insurance companies in the state automatically include the coverage in their policies in 34 at-risk counties (out of the state's total 102 counties). Insured customers who don't want the coverage in their policies have to reject it in writing. Coverage limits in Illinois vary depending on the insurer, and you should always check your policy to ensure you understand the level of mine subsidence coverage you will get.
Even if you live in one of Illinois' remaining 68 counties without mandated mine subsidence insurance, you can contact your homeowners insurance company to ask about adding an endorsement to cover the peril. This advice is applicable to regions of the country at a lower risk for mine subsidence, too. If you live somewhere that doesn't sponsor or mandate the insurance, but you still feel your home is at risk for subsidence-related damage, you should contact your homeowners insurance company to see if coverage is available.
Do You Need Mine Subsidence Insurance?
You will only need mine subsidence insurance if your home is near an underground mine, which you may be able to check online or from local sources, depending on your location. Some states, such as Illinois, Indiana and Pennsylvania, have online maps that allow you to search for your address and determine whether a mine is in your area. The most reliable way to understand your risk, however, is to source local knowledge. Talk to the seller or developer of your home about mine subsidence risks in your area, or check with a county clerk office or zoning board to see if they have any information about mine locations or mine subsidence episodes.
In some cases, your homeowners insurance policy may already include mine subsidence coverage because of state requirements. For example, Illinois and Ohio require property insurers to automatically include the coverage in their policies in the states' most at-risk counties for mine subsidence.
How Much Does Mine Subsidence Insurance Cost?
Regardless of your location, mine subsidence insurance is very affordable, with coverage much cheaper than a standard homeowners insurance policy. Costs can vary widely, however. For example, mine subsidence insurance in Indiana may cost as much as $138 for $200,000 in coverage. On the other hand, if you live in a county in Ohio where mine subsidence insurance is a mandatory component of property insurance policies, then you will pay only $1 per year for coverage. Even in Ohio counties where coverage is optional, premiums are only $5 per year.
|State||Annual mine subsidence insurance cost|
|Colorado||$35 (with a $200 inspection fee)|
|Ohio||$1 ($5 in optional counties)|