Mine Subsidence Insurance | Bankrate

Old mining areas can pose a variety of risks, one of which is known as mine subsidence. This threat may be more common in rural areas, but a surprising number of American cities have business and residential districts built right on top of old mining sites. Mine subsidence refers to when surface levels move in response to underground shifts and collapses in the old mining tunnels. Standard homeowners policies don’t generally cover mine subsidence damage, so if you live near an old mining site, you may want to have your property inspected for this threat and consider purchasing mine subsidence insurance.

What is mine subsidence?

Mine subsidence occurs when there is shifting, sinking or collapsing of the ground as a result of mines underground. When there is movement, it can cause sinkholes, depressions or troughs in the land, which can cause great damage to any structures built on or near it. Mine subsidence damage, by definition, is damage caused by a shifting or collapse of the earth from the human-built structure, and not because of a natural occurrence like you might find with an earthquake.

There are two types of mine subsidence, pit and slag:

• Pit subsidence: This form is typically small, with most pits less than 16 feet in diameter and eight feet deep (although the size of the pits can vary drastically). Pit subsidence appears as a steep-sided or bell-shaped hole. Since they’re not usually very large, they don’t often cause damage to homes, especially if the pit is filled quickly. 
• Sag subsidence: Sag subsidence is significantly larger and more common than pit subsidence since it’s caused by the collapse of a mine’s pillar supports and roof (not just the roof). You can often see mine subsidence by identifying a gentle dip in the ground that can be hundreds of feet in diameter. As sag subsidence grows, the depression can reach several acres in size.

There are pockets in the United States, such as in Pennsylvania and Illinois, where there is a greater concentration of abandoned mines near residential areas. While the Environmental Protection Agency (EPA) has identified 33 different states where abandoned land mines exist, only a handful of states have areas of concern where housing is built on or near possible mine subsidence. In general, abandoned land mines refer to areas where mining used to take place but is no longer active.

Do I need mine subsidence insurance?

The EPA identifies and labels abandoned mining sites, and your local insurance agent may be able to help determine which neighborhoods could be at risk of mine subsidence. Some states, like Pennsylvania, offer online tools to help people locate areas with mine subsidence risk.

Counties in some states, such as certain designated counties in Illinois, require that mine subsidence coverage be automatically included in home insurance policies, although this can be declined in writing by the policyholder. Whether the coverage is mandated or not, if you are concerned about your home’s proximity to abandoned land mines, it may be worth inquiring about adding the coverage.

Not every state offers mine subsidence insurance. Usually, only states with a higher risk of subsidence damage give homeowners the option (and sometimes require it). These states include:

• Colorado
• Illinois
• Indiana
• Kentucky
• Ohio
• Pennsylvania
• West Virginia
• Wyoming

How much mine subsidence coverage do I need?

Mine subsidence coverage may vary depending on what state you reside in and the insurance company writing your policy. In general, the coverage includes a deductible, but offers coverage up to a specific limit as stated in the policy. In most states, there are both minimums and maximums to how much coverage you can purchase. For example, in Indiana you can purchase up to $500,000 in coverage.

Where can I get mine subsidence insurance?

Depending on where you live, mine subsidence insurance may be available through private insurers or state programs. If you’re having trouble finding affordable coverage, it may help to work with a licensed insurance agent in your area who is familiar with mine subsidence insurance.

Some states, such as Illinois and West Virginia, require all homeowners insurance providers in the state to offer mine subsidence insurance coverage in affected counties. In Illinois, there are 34 counties where the insurance coverage must be automatically included in homeowners policies. If you are not a resident of one of these counties, you can inquire about adding it to your homeowners policy through your own carrier.

How much does mine subsidence insurance cost?

The cost of mine subsidence coverage varies depending on the insurance limits you choose and where you live. Some homeowners insurance policies may include the coverage already, so you may want to first confirm that your current homeowners policy does not automatically include mine subsidence insurance. Comparing quotes from private insurers with any potential coverage options from state programs may help you figure out what the cheapest option is for your coverage needs.

In Pennsylvania, there are policies available through the Pennsylvania Department of Environmental Protection for purchase. The department’s premium calculator quotes a rate of about $80 per year for a home with $300K in coverage in Tioga County. In Pennsylvania, the coverage can not exceed $1,000,000 or 120 percent of dwelling replacement cost, whichever is less.

Frequently asked questions

• Which states have a higher risk of mine subsidence?
  

  Mining was a common practice across much of the United States, but some areas saw far more mining activity than others, particularly in the West and Central U.S. The Bureau of Land Management estimates that over 500,000 abandoned mines exist throughout the U.S., many of them unmarked. States with a larger number of residential structures near abandoned mines include Colorado, Illinois, Indiana, Kentucky, Ohio, Pennsylvania, West Virginia and Wyoming.

• Is mine subsidence insurance worth it?
  

  Mine subsidence insurance is a fairly niche form of insurance and it isn’t widely applicable. If you live in one of the states the EPA lists as having greater risk of mine subsidence near residential areas, look into whether your home is near a historical mine. If you’re near an old abandoned mining site, consider buying coverage since it is not typically included in a standard homeowners insurance policy. Otherwise, you may not need to buy a policy. If you’re unsure, consider talking to a local licensed insurance agent for guidance.

• What is a mine subsistence insurance fund?
  

  A mine subsidence insurance fund provides reinsurance to insurance companies so that they can offer mine subsidence coverage on policies.These funds, run individually by different states, essentially help ensure residents are offered reasonable and fair mine subsidence insurance coverage. For example, Kentucky created the Kentucky Mine Subsidence Insurance Fund in 1984. Because of it, Kentucky homeowners and commercial property owners can purchase mine subsidence coverage to protect their property.

• How do I know if my home is affected by mine subsidence?
  

  When purchasing a home, the seller or property owners may be required by law to disclose whether the property is affected by mine subsidence. If a disclosure is not available, you may be able to use EPA maps or state search options to identify potential subsidence. Some states even have online tools where you can put in your exact location and find out if your property is affected. Or, if you live in an area prone to mine subsidence, you may want to look for signs of the problem. In many cases, the first signs of damage could be cracks in the foundation and sagging walls. Other common signs are sinkholes, cracks in the ground, uneven floors, doors and windows, and shifting walls. Damage to the electrical system, including short circuits, could be another sign.

• Is mine subsidence the same as earthquake insurance?
  

  No, earthquake coverage and mine subsidence insurance financially protect against two separate and distinct perils. Although both deal with damage caused by moving ground, earthquake insurance only covers damage caused by earthquakes, while mine subsidence insurance only covers damage caused by shifting or collapsing mines. If you live in an area with risks of both mine subsidence and earthquakes, you may want to consider buying both types of coverage.