Oil heat…you need a rider on your home owners insurance for spills?

November 11, 2014

Egads!  I was not aware of that until recently so I am sharing this tidbit of information:

Heating Oil Spill Remediation Coverage on Homes/Properties

Effective July 1, 2010 the regular homeowner’s and property insurance programs will no longer provide coverage for property damage and liability caused from heating oil spills stored in the homes/properties. However, the remediation coverage for oil spills can be bought and added as an endorsement on the regular homeowner’s and dwelling fire insurance policies.

Coverage applies to “Residence premises”, “Covered real property” and “Covered personal property”. Limit includes first-party property coverage per occurrence and third-party liability coverage per occurrence.

We at our agency have had two such claims last year: For one $150,000 was paid and on the other $250,000 was paid for clean up costs. There would have been further damages, if a water source had been polluted.

Home heating oil spills can be both a financial and emotional disaster for property owners. In addition to making sure they have the proper insurance protection, homeowners should consult with their fuel oil dealers to determine what preventative measures and system upgrades are needed. In most cases, heating systems which comply with the new regulations are unlikely to develop a leak or spill.

To qualify for the optional coverage, the dwelling must be built in 1990 or later. For homes built prior to 1990, the policyholder must provide proof that their heating system and tanks have been upgraded to comply with Massachusetts Chapter 453. A certificate from a heating oil dealer/supplier or from the local fire department confirming that the insured has installed either an oil safety valve or a non-metallic protective sleeve around the oil supply line to prevent leaks will be sufficient. Heating oil systems installed on or after January 1, 1990, most likely are already in compliance. State fire codes implemented these requirements on all new installations.

The cost to add the property damage coverage ranges from $52 to $87 per year. Most companies will provide the liability coverage at no additional cost and the others have a nominal charge ranging from $4 to $9 per year depending on the limits of the coverage.

Should you need further information on this new law in MA, please visit: http://www.mass.gov/dep/cleanup/laws/hhsl.htm or contact: