Illinois Mine Subsidence Insurance Fund

  • Mine Subsidence Damage

    Mine Subsidence Damage

    Large cracks in sidewalks, driveways and walls may indicate mine subsidence. They may also be indicative of changes in soil conditions or construction failures.
  • Mine Subsidence Damage

    Mine Subsidence Damage

    Large cracks in sidewalks, driveways and walls may indicate mine subsidence. They may also be indicative of changes in soil conditions or construction failures.
  • Mine Subsidence Damage

    Mine Subsidence Damage

    Large cracks in sidewalks, driveways and walls may indicate mine subsidence. They may also be indicative of changes in soil conditions or construction failures.
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Mission Statement

The Illinois Mine Subsidence Insurance Fund is a taxable enterprise created by Statute to operate as a private solution to a public problem. The purpose of the Fund is to assure financial resources are available to owners of property damaged by mine subsidence.  The Fund fills a gap in the insurance market for the benefit of Illinois property owners at risk of experiencing mine subsidence damage.

The Fund does this by providing reinsurance to insurance companies for damage caused by mine subsidence, conducting geotechnical investigations to determine if mine subsidence caused the damage, supporting and sponsoring mine subsidence related research and initiatives consistent with the public interest, and educating the public and the industry about mine subsidence and related issues.

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About Mine Subsidence Insurance

Buying/Selling Property

Buying or Selling a Home in Mine Subsidence Affected Areas

There are two statutes in Illinois that pertain to disclosure during the sale of residential property affected by mine subsidence. Both the seller and buyer should be aware of these requirements, and discuss any mine subsidence related disclosure in detail. The first, the Residential Real Property Disclosure Act (765 ILCS 77) states:

Sec. 25 (b) The seller shall disclose material defects of which the seller has actual knowledge.

The Act also requires completion of the Residential Real Property Disclosure Report found in 765 ILCS 77/35.

The second disclosure law is contained in the Mine Subsidence Disclosure Act (765 ILCS 95), which states:

Sec. 3 (a) At the time an agreement to transfer real property is made, the transferor shall disclose in writing to the transferee and lender all insurance claims paid to the transferor for mine subsidence on the real property.

If the seller has received payment from their insurance company on a mine subsidence claim for temporary repairs, an advance payment, or a final settlement payment, the seller must disclose this information to the buyer. Since unrepaired damage may make the home ineligible for mine subsidence insurance coverage, the seller may also wish to provide the following to the buyer:

Copy of letter from insurance company stating damaging ground movement has ended.Copy of insurance company estimate of repair costsCopy of paid bills documenting that repairs have been fully completed

Property with Unrepaired Mine Subsidence Damage May be Ineligible for Mine Subsidence Insurance

As noted above, the Mine Subsidence Statute permits insurance companies to refuse to provide mine subsidence insurance on any property with unrepaired mine subsidence damage.

(215 ILCS 5/808.1)
Sec. 808.1. Right of Insurers to Refuse to Provide Mine Subsidence Coverage. An insurer may refuse to provide mine subsidence coverage on a residence or commercial building evidencing unrepaired mine subsidence damage until such damage has been repaired.

We believe the purpose of Section 808.1 is to encourage property owners to use insurance payments to fully repair damaged property once damaging ground movement has ceased. If the property is sold before repairs are made, the cost of repairs should be one consideration in establishing a price for the property.

Transferring Property During an Ongoing Mine Subsidence Claim

Ground movement from mine subsidence can last many years, sometimes a decade or more. In many instances homes are bought and sold while an active mine subsidence event is taking place.

By statute, all damage caused by a single mine subsidence event, or several subsidence events which are continuous, constitutes one occurrence. This means that if the insurance claim is still open, the company insuring the property when the loss was first reported will continue to service the claim. To facilitate that process, the seller and buyer should consider using an Assignment of Claim Rights. This is a legal document drawn by an attorney for the buyer, and may be used to accomplish the following:

  • If at the time of sale the seller has not received any insurance payments for mine subsidence damage, the Assignment transfers seller's rights regarding the covered loss to the buyer.
  • If the seller has received some payment, but not exceeding the mine subsidence coverage limit, the Assignment allows the buyer to receive future payments, if any, to compensate for additional loss that may be due.

However, the total amount payable per mine subsidence occurrence to both seller and buyer is subject to the limit on the insurance policy in effect on the date of loss.

claimRights

The Assignment of Claim Rights entitles the buyer to any future loss payments on an open claim. It is often a necessary component of the real estate transaction when a home is being affected by active mine subsidence. However, if the policy limit has been exhausted, or the full amount of damage has previously been paid to the seller, the buyer will not receive any additional payments.

In addition to the Assignment of Claim Rights, the buyer should request the seller to provide the following information about the mine subsidence claim:

  • The amount of mine subsidence insurance coverage on date shown on the Assignment of Claim Rights
  • The insurance company estimate of cost to repair mine subsidence damage
  • The amount of mine subsidence claim payments already received

If property is transferred during an ongoing mine subsidence claim, the seller and buyer should notify their respective insurance companies and provide a copy of the Assignment of Claim Rights.

How to Obtain Mine Subsidence Insurance

By statute, all insurance companies writing property insurance in Illinois must provide coverage for mine subsidence. In the 34 counties in which most of the underground mining has been conducted, the statute requires mine subsidence insurance to be included in both residential and commercial policies. Coverage may be rejected in writing by the insured. These 34 mandatory counties are:

  • Bond
  • Bureau
  • Christian
  • Clinton
  • Douglas
  • Franklin
  • Fulton
  • Gallatin
  • Grundy
  • Jackson
  • Jefferson
  • Knox
  • LaSalle
  • Logan
  • McDonough
  • Macoupin
  • Madison
  • Marion
  • Marshall
  • Menard
  • Mercer
  • Montgomery
  • Peoria
  • Perry
  • Putnam
  • Randolph
  • Rock Island
  • St. Clair
  • Saline
  • Sangamon
  • Tazewill
  • Vermilion
  • Washington
  • Williamson
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In these mandatory counties, mine subsidence insurance is automatically included in the policy. The limit for coverage for mine subsidence is generally the same as the amount of insurance for fire or windstorm. If your property is located in one of the remaining non-mandatory counties, you may add mine subsidence coverage to your policy by contacting your insurance agent or company. The coverage is reasonably affordable and could save you thousands of dollars in out-of- pocket repairs.

Maximum Limits

Is There a Maximum Limit for Mine Subsidence Coverage?

The maximum limit of liability for mine subsidence coverage is usually the same as the amount of coverage provided by the primary insurer for loss due to other property perils such as fire or windstorm. However, there is a maximum amount of reinsurance available to primary insurers through the Fund. As of 7/1/2011, the maximum amount re-insurable for both residential and commercial structures is $750,000. For residential living units (condominium or co-op units) the maximum amount re-insurable is $15,000.

Primary insurers may offer additional mine subsidence coverage over and above the reinsured limit, but are not required to do so by law. In the residential market, primary insurers rarely offer additional coverage, so the Fund provides a limit of reinsurance that is adequate for the vast majority of homes in the mandatory counties. In the commercial market, there are a number of primary insurers that provide higher limits of mine subsidence coverage, even though it is not reinsured with the Fund. Also, higher limits of mine subsidence coverage can be purchased from specialty markets that operate as excess/surplus lines insurers. Those insurers sell coverage through excess surplus lines brokers that work on a wholesale basis. If your primary insurer does not offer the full amount of mine subsidence coverage needed, ask your agent to check the excess/surplus lines brokerage market. Although the Fund does not endorse any particular broker, the following are known to offer mine subsidence coverage in excess of the maximum limits reinsured by the Fund.

CRC Insurance Services, Inc.
www.crcins.com
550 W. Van Buren Street
Suite 1500
Chicago, IL 60607 

Interstate Risk Placement
www.interstaterisk.com
7320 N. Villa Lake Dr.
P. O. Box 3765
Peoria, IL 61612
Rick Sutton, V.P. Underwriting
Phone: 309-692-8544 or 800-642-8397

Evolution Insurance Brokers
www.eibdirect.com
303 W. Madison St. Suite 2075
Chicago, IL 60606
Bill Hines
Phone: 800-456-4576, ext. 7815
This email address is being protected from spambots. You need JavaScript enabled to view it.

W. A. Schickedanz Agency
www.waschickedanz.com
300 W. Main St.
P. O. Box 445
Belleville, IL 62222
David Miller, CPCU, V.P.
Phone: 618-233-0644
Toll Free: 800-869-9976

Maximum Independent Brokerage, LLC
www.maxib.com
222 S. Riverside Plaza, Suite 2340
Chicago, IL 60606
Joe Messina, President and CEO
Phone: 312-559-9340
This email address is being protected from spambots. You need JavaScript enabled to view it.

Should I Purchase Mine Subsidence Insurance?

The Illinois State Geological Survey (ISGS) has estimated that 201,000 acres of urban and built-up lands may be in close proximity to underground mines. Their study also estimates as many as 330,000 homes may be undermined. Mine maps are often an excellent source for locating abandoned mines in a given area. The Illinois State Geological Survey maintains the state's largest collection of mine maps, and allows public access via the internet. In 2010, the ISGS created the Coal Mine Locator which allows the user to determine the proximity of a home or business to coal mines and underground industrial mines. This feature is available on the ISGS website at: http://www.isgs.illinois.edu/ilmines

Please note that the accuracy and completeness of the mine maps vary, depending on the availability and quality of source material. Little or no information is available for many older mines because mining activity was not regulated or documented until the late 1800's. Even then, reporting requirements were minimal. Also, early mine maps were often sketched by miners working in the mine at the time, or were constructed solely form memory. However, mine maps are a good source for determining if mines are present in the general area of your property.

Also, if you are purchasing a home or starting new construction, ask the seller or developer to disclose any information about underground mining or previous mine subsidence claims in the surrounding area. Ask neighbors and business owners if they are aware of a history of mine subsidence in the neighborhood. In some areas, the County Clerk's office or a zoning board may have information about past mine subsidence incidents.

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