Senate Committee passes bill that includes mine subsidence insurance bill
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Wednesday, March 10, 2010
FRANKFORT – The Senate Natural Resources and Energy Committee today adopted the provisions of Senator Jerry P. Rhoads’ bill (Senate Bill 63), that increases the total coverage available for mine subsidence damage, per policy, from $100,000 to $300,000 of insured value per structure, as a Senate Committee Substitute to House Bill 268.
Mine subsidence is the collapse of underground coal mines resulting in direct damage to a structure. The Kentucky Mine Subsidence Insurance Fund (KMSIF), administered by the Kentucky Department of Insurance, exists to pay claims for structure damage caused by mine subsidence.
Senator Rhoads, D-Madisonville, said, the fund can only pay a maximum of $100,000 per structure for subsidence damage, which is sufficient unless a homeowner sustains damages in excess of $100,000. Currently, there are no funds available to assist with temporary displacement due to a home being uninhabitable. Under the bill, a living expense allowance of up to $25,000 is included for those who are temporarily displaced as the direct result of damage to the home caused by mine subsidence.
The fund is paid for by an additional charge to homeowner’s insurance or other coverage for a structure. The charge is currently $20 per $100,000 of coverage for a dwelling and $25 for $100,000 of coverage for a non-dwelling.
Thirty-seven counties are participating in the program: Bell, Boyd, Breathitt, Butler, Carter, Christian, Clay, Daviess, Edmonson, Elliott, 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 and Wolfe.
A typical homeowner’s insurance policy does not provide coverage for damage originating from earth movement, settling, shrinking, bulging or expansion of soil, including the resultant cracking of pavements, patios, foundations, walls, floors, roofs or ceilings. Therefore, without KMSIF, a property owner suffering a loss from underground coal mine subsidence would not be insured and would have to seek legal remedy against the coal mine owner(s). Unfortunately, many underground mine owners have moved out of state, gone out of business, or cannot be found, so property owners would have no practical course of action to recover damages.
KMSIF allows property owners to recover damages without spending their time and money on legal action, said Senator Rhoads.
Questions, further information requests or comments about the KMSIF may be addressed to the Kentucky Mine Subsidence Insurance Fund, P.O. Box 517, Frankfort, KY 40602-0517, 502-564-6083 or toll free 800-595-6053. The TDD line for the deaf or hearing-impaired is 800-648-6053.
HB 268 as amended by the Senate Committee Substitute would now move to the floor of the State Senate for a vote. If the bill gains approval in the Senate, it will be sent back to the House of Representatives for final approval.
Senator Rhoads represents the 6th senatorial district, which includes Hopkins, Muhlenberg and Ohio counties.
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