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 provides 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 members of the Ohio Mine Subsidence Insurance Underwriting Association and offer this coverage.
Mine subsidence legislation
Legislation passed in 1992 established mandatory and optional counties in regard to the purchase of mine subsidence coverage. Property insurance policyholders (owners of homes, farms, mobile homes or dwelling fire policies) in 26 counties are required to obtain mine subsidence coverage upon purchase or renewal of their insurance.
The counties included in this mandatory coverage area are noted on the chart below. In these counties there are about 819,648 properties eligible for mine subsidence coverage.
Mine subsidence insurance premiums in mandatory counties is not to exceed $5, and is currently $1.
Eleven counties offer “optional” mine subsidence coverage, with the annual premium not to exceed $20. It is currently $5. Optional county residents are offered this coverage when purchasing or renewing their policies, but purchase is not required. Optional coverage counties are also shown on the chart.
HB 425 passed in 2005 authorizing the Ohio Mine Subsidence Insurance Governing Board to broaden coverage and increase limits. The Board anticipates making some changes effective 1/1/06, but no coverage changes have been implemented at the close of publishing.
Coverage and eligibility
Standard homeowners insurance policies don’t typically 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 2% coverage deductible applies, with a $250 minimum and $500 maximum.
Mine subsidence insurance is available for 1–4 unit family dwellings. It covers the cost of excavation or grading, boilers or engines below the under-surface 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, commercially rated dwellings, outbuildings, barns, land, trees, crops, plants or contents. Vacant buildings or those with less than 50% occupancy are also excluded.
Mine subsidence statistics
In 2004, the Ohio Mine Subsidence Insurance Underwriting Association issued 638,891 policies, which is about 42.2% of the properties eligible for coverage in both mandatory and optional counties. There were 641,299 policies in force in 2003, or 42.6% of the eligible properties. Claims paid in 2004 totaled $218,566 and $26,643 in 2003. Claim payments include loss adjustment expenses. 72 claims were closed in 2004, and 105 were closed in 2003. Reserves at year-end 2004 were $100,914 and $214,000 in 2003.
NOTE: For more information online, go to www.ohiominesubsidence.com.