Pennsylvania Insurance Program for Homes Above Mines Active

By Brad Bumsted | January 13, 2011

As many as 1 million Pennsylvania homes sit above abandoned coal mines, yet a state-subsidized insurance program for mine subsidence has issued only 58,000 policies.

Abandoned mines are in 43 of Pennsylvania’s 67 counties, including in Allegheny, Westmoreland, Armstrong, Beaver, Butler, Washington, Fayette and Greene counties, according to a state Department of Environmental Protection map.

DEP’s John Stefanko recommended property owners buy the insurance for peace of mind. Buyers pay according to the amount of coverage _ for example, about $97 a year for $150,000 worth of residential coverage. Homeowners insurance typically does not cover damage caused by mine subsidence.

How few people have it “is a concern for us,” said Stefanko, executive assistant to the agency’s Mining and Mineral Resources division.

“We estimate that more than a million Pennsylvania homes sit atop abandoned mines, yet many homeowners are not insured against catastrophic property losses if these mines should collapse” said DEP Secretary John Hanger. “That’s why Pennsylvania has made mine subsidence insurance more affordable.” Premiums were reduced 20 percent in January 2009.

More residents are buying the insurance, DEP says. Five years ago, 53,000 policies covered property valued at $5.1 billion. The 58,000 policies today cover $8.7 billion in property. A separate policy is needed for each building on a property. For example, the owner of a house with a detached garage would need two policies to cover both structures.

People living above active mines don’t need to buy the insurance, Stefanko said. Under state law, operators of active mines are responsible for subsidence damage.

DEP’s figures raise the question of whether it’s unsafe to live above an abandoned mine, as thousands of Western Pennsylvania residents do.

Subsidence can cause cracks in walls, sidewalks and foundations. In extreme cases, says a DEP brochure, it can cause a house to “tilt, sink or collapse.”

For the most part, damage to a home is rare and not severe, said Tom Hoffman, a former Consol Energy vice president.

“It doesn’t occur often,” Hoffman said. “On the other hand, it is not predictable.”

Said Stefanko: “The dramatic ones are very much in the minority.”

Hoffman said that although subsidence could cause substantial damage to a house, it generally isn’t life-threatening.

DEP handled 175 claims for insurance in 2009 and 10 were paid for a total of $372,599. In 2008, there were 227 total claims and 27 were paid for a little more than $1 million.

Hoffman bought the state insurance on his home in the South Hills “for that occurrence that may be rare.”

“My house is 60 years old, and for 60 years there has not been any subsidence here,” Hoffman said. But a case did happen a quarter-mile from his home, he said.

“Like all insurance, you may never use it,” Hoffman added.

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