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Evaluating Whether To Buy Mine Subsidence Coverage For Your Homeowners Insurance Policy

2010-02-09

Damage to a home often comes from outside sources such as hail, lightning, or wind. However, there are instances in which the earth itself can move, causing significant destruction. Typical homeowners insurance coverage will not pay out for this type of damage, as it is typically listed under an "earth movement exclusion clause". However, in some states where there is a higher-than-average possibility that a home or dwelling may have been built on an old mining facility, a specialized add-on for a home insurance policy, known as mine subsidence coverage, is available.

In many states, this coverage is not available because it is simply not necessary. In states such as Illinois, Kentucky, West Virginia and Ohio, however, mine subsidence coverage can be a very real necessity, owing to the number and types of underground mines located in the region. Regulations regarding of this type of homeowners insurance policy is handled by the state itself, which designates which counties must automatically include it on any insurance policy, and which can list it as an option. This type of coverage will cover any damage to the home due to horizontal or vertical movement of its structure brought on by the collapse of an underground mine. Coverage limits for these policies range from $250,000 to $500,000 and come with a similar deductible to standard home insurance plans.

The added cost to the owner's premium is typically between $1 and $5 per year, and the coverage may extend to driveways and sidewalks around the home itself. For this type of damage to be claimed, however, there must also be damage to the home. An insurance company will not pay out a claim if only outbuildings or driveways are damaged. As well, land, trees or crops are not covered under this insurance. In counties where mine subsidence coverage is optional, homeowners are required to sign a waiver stating they have been informed of the risks and are declining the coverage at their own potential loss. Any homeowner told that their county recommends this type of insurance should seriously consider purchasing it, as its cost is relatively low for the security it provides.

Underground mine structures are extremely unstable, and can withstand years of degradation before collapsing entirely causing massive, sudden damage to a property, or can degrade bit by bit, causing significant damage over time. In either case, any county where there has been significant mining activity in the last two centuries will, if not mandate, at least recommend mine subsidence coverage. Although a mine-shifting event may never happen in the lifetime of the home, the low premium for the coverage makes it a worthwhile investment against an unknown risk.