Mine subsidence is caused by the collapse or lateral or vertical movement
of structures resulting from the caving in of underground mines. Mine
subsidence insurance has been available in Ohio since October, 1987. It
is administered by the Ohio FAIR Plan, which is under contract to provide
administrative and claims handling services for the Ohio Mine Subsidence
Insurance Governing Board. Insurance companies that offer basic or multi-peril
property insurance within the 37 eligible Ohio counties are required to
become members of the Ohio Mine Subsidence Insurance Underwriting Association
and offer this coverage to all eligible applicants.
Mine subsidence legislation
Legislation passed in 1992 established mandatory and optional counties in regard to the purchase of mine subsidence insurance coverage. Currently, property insurance policyholders (owners of homes, farms, mobile homes or dwelling fire policies) in 26 counties are required to obtain mine subsidence coverage when purchasing or renewing their homeowners insurance.
The counties included in this mandatory coverage area are Athens, Belmont, Carroll, Columbiana, Coshocton, Gallia, Guernsey, Harrison, Hocking, Holmes, Jackson, Jefferson, Lawrence, Mahoning, Meigs, Monroe, Morgan, Muskingum, Noble, Perry, Scioto, Stark, Trumbull, Tuscarawas, Vinton and Washington. In these 26 counties, there are about 666,000 properties eligible for mine subsidence coverage.
This legislation also provides that the mandatory mine subsidence coverage premium will not exceed $5. The Mine Subsidence Board of Governors voted in premium decreases in 1999. The annual premium for mine subsidence coverage for home owners in mandatory counties is currently $1.00. It was previously set at $3.00.
The statute also provides that 11 counties are eligible for “optional” mine subsidence coverage, with the annual premium not to exceed $20. The annual premium in optional counties was also lowered in 1999 from $12.00 to the current annual premium of $5.00. Counties designated for optional coverage are: Delaware, Erie, Geauga, Lake, Licking, Medina, Ottawa, Portage, Preble, Summit and Wayne.
Home owners in optional counties are offered mine subsidence insurance when purchasing or renewing their policies, although its purchase is not required. The chart below shows the specific location of each of the mandatory and optional counties.
The 1992 law was passed as a mine subsidence program solvency measure. In 1999, the Ohio Mine Subsidence Insurance Underwriting Association issued 595,232 policies, which is 50.5% of the properties eligible for coverage in both mandatory and optional counties. The number of policies at year-end 2000 is expected to be about 620,000. Claims paid in 1999 totaled $62,000, compared to 1998 claim payments of about $134,000.
Coverage and eligibility
It’s important to note that standard homeowners insurance policies do not automatically cover damage due to mine subsidence. Under mine subsidence insurance, coverage is equal to the amount of insurance on the dwelling or $50,000, whichever is less. A deductible of 2% of the coverage available applies, with a $250 minimum and $500 maximum.
Mine subsidence insurance coverage is available for 1–4 family dwellings. It covers the cost of excavation or grading, boilers or engines below the undersurface of the lowest basement floor (or where there is no basement below the surface of the ground), and underground pilings, piers, pipes, flues and drains and/or pilings below the watermark.
Coverage does not extend to industrial/commercial buildings, dwelling buildings that are commercially rated, outbuildings, barns, land, trees, crops, plants or contents. Vacant buildings or those that have less than 50% occupancy for 60 days are also excluded.
(AP Wire, 10/30/00)
(Insurance Information Institute)