Topics covered:

Introduction

Mine subsidence overview

Indiana Endorsement HO 23 83

Illinois endorsements HO 23 88 and HO 23 98

Kentucky endorsements HO 23 84 and HO 23 87

West Virginia endorsement HO 23 31 08 95

Sinkhole collapse

Introduction

The Insurance Services Office (ISO) 1991 homeowners forms excluded coverage for “earth movement, meaning…mine subsidence; earth sinking, rising or shifting…” Therefore, loss caused by these occurrences was excluded unless coverage was specifically endorsed onto the policy. But with the Homeowners 2000 program, the exclusion was changed to exclude “b. Landslide, mudslide or mudflow; c. Subsidence or sinkhole…” In order to make the point that subsidence encompasses subsidence resulting from a mine's cave-in, the mandatory special provisions for many states amend the definition of earth movement. See, for example, HO 01 01 09 00 Special Provisions – Alabama, which now states that “earth movement” means “earthquake, including land shock waves or tremors before, during or after a volcanic eruption; landslide; mine subsidence; mudflow; earth sinking, rising or shifting…”

Four states—Illinois, Indiana, Kentucky, and West Virginia—offer coverage for loss caused by mine subsidence through use of special endorsements to standard ISO homeowners forms. Indiana, Kentucky, and West Virginia specifically limit coverage to damage arising out of coal mine subsidence. Illinois includes coverage for loss or damage caused by subsidence of coal, clay, limestone, or fluorspar mines, but makes the point that this list is not inclusive.

Some states offer coverage for loss resulting from mine subsidence directly through the state itself, such as Pennsylvania 's Coal and Clay Mine Subsidence Insurance Fund. The web site for Pennsylvania is: http://www.dep.state.pa.us/dep/deputate/minres/bmr/msipage/HomeOwners.html. Pennsylvania offers coverage for both residential and nonresidential risks up to $250,000. Ohio offers coverage up to $50,000 for homes in eligible counties through the Ohio Mine Subsidence Insurance Underwriting Association. See http://www.dnr.state.oh.us/publications/geo/insurance.html. Colorado provides protection through a fund only for residences built prior to February 22, 1989 which have been identified as being in a subsidence prone area. This is technically not an insurance program. The homeowner must pay for an inspection to enroll, and then pay an annual fee for four years. After that, no fee is required from the original participant. See http://www.mining.state.co.us/dmginactive.html and click on Mine Subsidence Protection Program for information.

Coverage for loss caused by sinkhole collapse may be purchased where allowed. One state, Florida , has mandated (Fla. Stat. 627.706, 1981) that homeowners forms include coverage for loss caused by sinkhole collapse, but no other states have mandated this coverage.

The ISO endorsements for mine subsidence coverage are: Indiana, HO 23 83 09 01; Kentucky, HO 23 84 01 01 and HO 23 87 01 01; Illinois, HO 23 88 04 01 and HO 23 98 04 01 and West Virginia, HO 23 31 08 95. The sinkhole collapse coverage endorsement is HO 04 99 10 00, but Oregon uses endorsement HO 04 99 02 00. In the following discussion, we will review some judicial thinking on the issues surrounding sinkhole collapse and mine subsidence, and then examine the coverages provided by the current editions of the ISO endorsements.