The Pennsylvania House of Representatives has approved legislation to establish a state-run insurance program for landslides and sinkholes as these natural disasters become more common in the state.
House Bill 589, if enacted, would make landslide and sinkhole insurance policies available to all property owners at competitive rates. The bill states that the program aims to provide actuarially sound coverage.
The proposed insurance program would be managed by the Pennsylvania Department of Community and Economic Development. Oversight would be provided by a board composed of representatives from six state agencies, including the insurance department and the state’s emergency management agency.
The board would be responsible for setting rates that are sufficient to cover losses and maintain adequate reserves. Premiums could be determined using several factors, such as the condition of the property, the policyholder’s loss history, and the financial needs of the fund.
The bill requires that 5% of all premiums be set aside until the surplus is large enough to cover all risk and ensure the program’s solvency.
If the measure passes, $10 million would be transferred from the state’s general fund to the insurance fund for the 2025-2026 fiscal year. Should the insurance fund’s assets reach at least $20 million, $10 million would be returned to the general fund, provided that the program’s solvency is not at risk.
Sinkhole and landslide risks are increasing in various regions due to extreme weather and urban development, with experts noting that certain geological conditions make some areas more susceptible. These trends have led to greater attention on the need for specialized insurance coverage for property owners facing these risks.
State Rep. Emily Kinkead, a Democrat representing Allegheny County and the bill’s sponsor, said landslides cause millions of dollars in property damage each year in Pennsylvania.
“Yet, property owners cannot purchase insurance for landslides like they can for floods and other natural disasters,” Kinkead said. She explained that until the bill becomes law, homeowners in the state remain vulnerable to financial ruin from landslides and sinkholes.
The bill comes at a time when the lapse in authority for the National Flood Insurance Program (NFIP) during a recent federal government shutdown left millions of property owners in limbo, highlighting the importance of state-based insurance solutions for natural disasters.
The shutdown halted new NFIP policies and renewals, raising concerns about the program’s ability to pay claims during peak hurricane season and causing confusion among policyholders and agents.
State insurance commissioners have urged Congress to extend the NFIP and support growth in the private flood insurance market, emphasizing the need for long-term stability and improved risk management for natural disasters. Their recommendations include long-term reauthorization and improved risk mapping to help communities prepare for and recover from disasters.
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