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Homes above abandoned mines need extra insurance coverage

By Justin Stoltzfus

Many home owners already have insurance that covers above-ground disasters like tornadoes, lightning and fires. But those in some areas of the United States also face risks from below if their houses sit atop abandoned mines. Luckily, they may be eligible for low-cost, state-sponsored mine subsidence insurance (MSI).

What is mine subsidence insurance?

MSI covers damage to your home and other structures on your property caused by abandoned mines. Policies usually cover the costs of excavation, foundation repair and damage to underground utilities, as well as damages to “appurtences” like driveways, attached garages and fences, according to the Ohio Department of Natural Resources. If you have other buildings on your property like an unattached garage, you may need a separate policy for each, according to the Pennsylvania Department of Environmental Protection.

Why would I need mine subsidence insurance?

Active mines must buy insurance that protects property owners from any damages they cause. But, in the case of unused mine structures, there may be no private party to hold responsible in the event of an accident. Collapsed mine shafts can cause sinkholes that can drastically affect nearby buildings. Homes can tilt, sag or even partially collapse. And all of this, according to the Pennsylvania Department of Environmental Protection, is not covered by conventional home insurance.

Many homeowners in states with a lot of abandoned mines like Ohio and Pennsylvania don’t have MSI coverage. According to the Insurance Journal, about 1 million homes in Pennsylvania are situated above abandoned mines, but the state-subsidized MSI program has only issued 58,000 policies.

Depending on where you live, you may be required to buy an MSI policy. It’s optional in Pennsylvania, although the Department of Environmental Protection provides a ZIP code lookup service that helps residents determine their risks. Ohio, meanwhile, requires it in several high-risk counties, according to the Department of Natural Resources.

How much does mine subsidence insurance cost?

How much your policy costs depends on how much coverage you buy. Pennsylvania’s program is state-subsidized, with premiums ranging from $10 a year for $5,000 of coverage to $307 a year for $500,000 of coverage. The deductible for residential buildings is $250. The Pennsylvania Department of Environmental Protection recommends buying enough MSI to cover your home’s replacement value, plus 10 percent for other structures on your property.

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