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Subsidence Insurance Risk Increases in the Year of the Ox

January 27, 2009

Gung Hay Fat Choy!, or Happy Chinese New Year.

Chinese New Year, Year of the Earth Ox,

This year is the Year of the Earth Ox. With the ox also being an earth animal, for the coming year, till February 2010, we will have to pay extra attention to matters of the Earth. Which makes me write about a lesser known, but important home / property insurance, namely subsidence insurance.

Subsidence Insurance

Subsidence isn’t reserved for houses perched on the edge of cliffs. You will find that a range of causes, such as mining, water abstraction, extreme weather conditions, tree planting and tree removal can affect the ground beneath your house. A subsidence insurance policy can protect damage to complete buildings, buildings under construction, and appurtenances to the buildings, including fences, sidewalks, driveways, in-ground swimming pools and similar.

Therefore, every property owner should consider getting subsidence insurance. Of course, some neighborhoods and certain houses are exposed to more risk than others. Insurers carefully review their subsidence insurance applications, as their pay-out requirements can be high. Regular assessments of homes in the highest risk areas may be required. Over time, premiums may increase because of long-term risks. Most policies include a small deductible. Subsidence insurance is only available for property owners, not renters.

Subsidence

Is Your Home At Risk From Subsidence?

When you are purchasing a new home, inquire about the property’s subsidence risk as part of your conveyance. If your new home has a high risk of subsidence, you have to ensure you take out a solid subsidence insurance policy.

For your existing home, you should seriously consider subsidence insurance, when you see any of these signs:
* Cracks / bulges appearing in walls.
* Doors and windows beginning to stick.
* Ripples appearing in wallpaper.

Subsidence is not as uncommon as you expect. Here is a real life current sample.

Sample of Real Subsidence Risk Exposed

One type of subsidence is mine subsidence. Mine subsidence happens when the rock and soil ceilings of underground mines collapse, and so cause surface holes and troughs that can damage property above. This is exactly what is happening today in a Pittson, Pennsylvania.

A recently completed study by the Department of Environmental found that the potential for mine subsidence exists throughout the City of Pittston, according to the acting state Department of Environmental Protection Secretary, John Hanger, who stressed that the report’s initial findings underscore the importance of mine subsidence insurance coverage. Over 1 million properties in Pennsylvania are above abandoned coal mines. However, but only 57,000 households have taken out subsidence insurance policies.

John Hangar explained that the mines that wind underneath Pittston’s streets and homes have a high subsidence risk because they were dug so close to the surface (as close as within 50 ft of the surface in some places). Most Pittston mine shafts are over 60 years old and deteriorating rapidly. “As time goes on, the subsidence problems are probably only going to get worse. The supports in these mines deteriorate over time. The risk is increasing with time.”

State Subsidence Insurance Plans

Pittston - Pennsylvania is not the only town where the problem of subsidence is surfacing. There are many more, and there is government support available.

Besides Pennsylvania there are six other states who have adopted state subsidence insurance plans to assist home owners in recovering when subsidence damage occurs. Pennsylvania was the earliest state which such plan established in 1962. However, the plan of Illinois is the most comprehensive and highest regarded.

Your Home Insurance Policy Might Not Cover It

As mentioned earlier, mining is just one of the many types of subsidence that can occur. Consider getting coverage in the year of the Ox for the types of subsidence that are potentially affecting your home.

Do not assume that your home insurance policy includes subsidence insurance, but review your current policy for details. Sometimes subsidence is added as an extra, but this is often not automatically included.

source: “Environmental Regulation of Coal Mining” By James M. McElfish, Ann E. Beier, Environmental Law Institute; Citizens Voice, PA

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Written by Lang Insurance Advisor · Filed Under Homeowner's Insurance 

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