Mine subsidence is the collapse of an underground coal mine which results in direct damage to a structure. Homeowners' insurance policies exclude coverage for losses arising from mine subsidence.
In 1984, the Kentucky Legislature enacted a law that established the Kentucky Mine Subsidence Insurance Fund (KMSIF), which allows residents of certain counties to purchase insurance coverage for property losses caused by underground coal mine subsidence. The KMSIF makes it possible for insurance companies to add this coverage to both personal and commercial property insurance policies.
Without mine subsidence insurance coverage, a property owner suffering a mine subsidence loss would have to seek legal remedy against coal mining companies. With the KMSIF, recovery through the property owner’s insurance policy is more expedient, and does not require the policyholder to spend time and money on legal actions.
Residents of 37 Kentucky counties are eligible to purchase mine subsidence insurance coverage for their homes and businesses. This insurance coverage provides protection for structures built near active or abandoned underground coal mines. If these mines collapse, structures can suffer costly damage that property insurance policies do not cover. The Kentucky Mine Subsidence Insurance Fund makes it possible for property owners to purchase this coverage from their insurance agent. If you are a resident in any of the following counties, see your insurance agent for details:
Bell, Boyd, Breathitt, Butler, Carter, Christian, Clay, Daviess, Edmonson, Elliot, Floyd, Greenup, Hancock, Harlan, Henderson, Hopkins, Jackson, Johnson, Knott, Knox, Laurel, Lawrence, Lee, Leslie, Letcher, Martin, McCreary, McLean, Morgan, Muhlenberg, Ohio, Owsley, Perry, Union, Webster, Whitley, Wolfe.
Pursuant to KRS 304.44-030
, every authorized insurer providing coverage for structures located in certain Kentucky counties must offer a mine subsidence endorsement with their property insurance policies. The Kentucky Mine Subsidence Insurance Fund (KMSIF) reinsures companies for mine subsidence losses after the company has entered into a reinsurance agreement with the KMSIF. The reinsurance agreement requires each company to undertake the administration of mine subsidence coverage and the adjustment of mine subsidence losses under those policies. The fund is sustained by premiums collected quarterly from companies writing mine subsidence coverage. The reinsurance agreement, quarterly premium report, and additional guidelines are included in the KMSIF Plan of Operation.