If you have a heating oil tank in your home, be sure you consider purchasing an “Escaped Liquid Fuel Endorsement” aka Oil Remediation coverage for your policy if you haven’t already done so. Because not every home is heated by oil, home insurance policies typically exclude coverage for fuel contamination to personal property, groundwater, and a neighbor’s property unless you have purchased oil remediation coverage, which is optional.
In 2008, Massachusetts passed a law that requires:
- the installation of either an oil safety valve or an oil supply line with protective sleeve on systems that do not currently have these devices; and
- insurance companies that write homeowner policies to offer coverage for leaks from heating systems that use oil.
Given the amount of time since the law went into effect, homeowners with oil heat have most likely had their heating systems serviced and upgraded if necessary to comply with the law; however, many homeowners have not purchased this optional coverage and would have to pay out of pocket if a spill occurs. Example: A homeowner has a gasket fail in their heating system causing oil to leak onto their finished basement. Oil is absorbed into the flooring, walls and concrete, but luckily, the homeowner discovered the leak before it reached the ground below. The cost to repair was over $30,000, which wouldn’t be covered without having an Escaped Liquid Fuel Endorsement.
The possibility of an oil spill remains regardless of the age of your system and any upgrades. Clean-up and potential liability costs can be substantial compared to the cost of adding this coverage, which ranges between $50-$100 on average depending on the coverage you purchase. Coverage limits provided vary by insurance company, but typically start at a minimum of $50,000 for your personal property and $100,000+ for third-party liability.
If you have oil heat, but haven’t yet talked with us about obtaining oil remediation coverage, contact a Murphy Insurance Associate today to discuss available options.