An Act establishing the Landslide and Sinkhole Insurance Program and the Landslide and Sinkhole Insurance Fund; establishing and providing for the powers and duties of the Landslide and Sinkhole Insur . . .ance Board; providing for duties of the Auditor General; imposing a penalty; and making transfers.
HB589 establishes a new state-run Landslide and Sinkhole Insurance Program within the Department of Community and Economic Development and creates a restricted Landslide and Sinkhole Insurance Fund in the State Treasury to pay covered claims. The bill is designed to provide insurance for damage caused by landslides and sinkholes, with the stated goals of making coverage actuarially sound, widely available, and competitively priced. It directs the program to use geological data, GIS mapping, and other scientific tools to identify high-risk areas, publish statewide risk maps, and develop a community rating system that reflects local landslide and sinkhole risk.
The bill creates a Landslide and Sinkhole Insurance Board made up of state officials from emergency management, community development, conservation, insurance, treasury, and transportation. That board would administer the program, set premiums, approve applications, investigate claims, maintain a public website, and coordinate with state and local governments on risk reduction and land-use practices. The bill also requires annual audits by the Auditor General, annual reporting to legislative committees, and allows private insurers to offer similar coverage if approved by the Insurance Commissioner.
HB589 would change state law by creating a new insurance and mitigation framework for a natural hazard that is not generally covered by the National Flood Insurance Program. It authorizes premium collections, sets a maximum initial coverage amount of the lesser of replacement cost or $150,000, allows inflation protection and increased coverage under certain conditions, and provides for escrow of premiums by mortgage lenders. The bill also includes funding provisions, including a $10 million transfer from the General Fund to seed the insurance fund for FY 2025-2026 and additional transfers if the fund falls below $10 million, with the possibility of returning money to the General Fund if the fund grows to at least $20 million and solvency is not impaired.
The overall sentiment around the bill appears strongly favorable. It advanced through multiple committees and the House with large bipartisan margins, including unanimous or near-unanimous committee votes and a 203-0 House floor vote on an earlier printer’s number, followed by final passage on the amended version by a vote of 152-51. The broad support suggests recognition of landslide and sinkhole damage as a real property and infrastructure problem, especially in southwestern Pennsylvania, and agreement that a state insurance mechanism could fill a coverage gap.
The main points of contention likely center on the cost and structure of the program rather than the need for it. The bill requires General Fund transfers and ongoing appropriations, which may raise concerns about fiscal exposure, while its land-use controls, property eligibility limits, and premium-rating system could be viewed as burdensome or restrictive by some property owners, local governments, or developers. The bill also conditions coverage on compliance with local prevention measures and excludes properties found to be in violation of laws restricting development in high-risk areas, reflecting a policy choice to pair insurance with mitigation and land-use regulation.
HB589 would add a new chapter of state law creating a public insurance program for landslide and sinkhole damage, along with a dedicated fund, board, audit requirements, premium-setting authority, claim procedures, and related administrative rules. It would also affect local land-use and building-code practices by encouraging or conditioning coverage on mitigation measures and compliance with local restrictions in high-risk areas. The bill creates new duties for the Department of Community and Economic Development, the State Treasurer, the Auditor General, the Insurance Commissioner, and other agencies, while also authorizing private insurers to write comparable coverage.
The bill appears to have broad support and relatively little opposition in the legislative process. It passed key committee votes overwhelmingly and cleared the House floor on final passage by a substantial margin, indicating a generally positive view of the need to address landslide and sinkhole losses. The vote history suggests the concept was not highly controversial in principle, though the final 152-51 vote shows that a meaningful minority remained unconvinced or concerned about the program’s design or fiscal implications.
The most likely areas of disagreement are fiscal responsibility, state exposure, and regulatory reach. Critics may object to the General Fund transfer and the possibility of future transfers to keep the insurance fund solvent, as well as the administrative costs of creating a new state insurance program. Others may be concerned about the bill’s land-use controls, eligibility restrictions, and premium incentives, which tie insurance availability and pricing to local mitigation efforts and compliance with zoning or development rules. Supporters, by contrast, appear to view those features as necessary to reduce risk and keep the program financially sound.