My experience adding homeowners insurance coverage for my oil tank: what to expect

 

Adobe Firefly AI:  "Illustration of a leaking heating oil tank in a basement"

Have you been thinking about adding coverage for a heating oil leak to your homeowners policy?   I went through the process this fall and wrote up my experience.  If you've been wondering what you'll need or what it will cost, maybe this will help you.

For a long time I was not aware that heating your home with #2 heating oil is pretty much a New England experience.  The first time I mentioned to someone from the Southwest that I had almost three hundred gallons of heating oil my basement, he thought I was a "doomsday prepper."   No, just prepped for a couple months of winter weather.

Periodically I read the same kind of horror stories about heating oil in the news: typically, someone's heating oil tank failed catastrophically, and the spilled oil will cost them hundreds of thousands of dollars to remediate.  Standard homeowner’s policies don't cover that remediation, so the story typically explains how they've had to sue the delivery company, or the previous homeowner to spread the costs around.  Disconcertingly, a lot of the stories seem to end without a final conclusion:  the money for the cleanup has run out, the house is jacked up, the contractor is still digging up the yard, and no one is sure when it will end.

This story about a spill in Rutland was what prompted me to act.

I always make a note to add an "Escaped Fuel Endorsement" to our homeowner’s policy after I read one of these stories, and this fall I finally went through with it.  It was not difficult:  I was able to handle everything by email and it was relatively inexpensive.   I did need to provide some info and dig up one obscure certificate, and it did take a while.

For us adding the "Escaped Fuel Endorsement" added $57/year to the cost of our homeowners policy.  Our homeowner’s policy is through Amica: we've been customers for 20 years and have a number of policies through them, but I don't think that had an impact on the cost of the extra endorsement.   Our tank is also not very old -- we replaced it five years ago.

Adding the endorsement took two and one-half months from start to finish.  Having only been through it once, I can't say whether it always takes a long time to add this endorsement.   I first requested it on August 30th, and it was finally added to our policy on November 17th.    In the middle of the process there was catastrophic flooding in Leominster, and for a time Amica published a notice that they were suspending policy changes to allow them to focus on the many claims that resulted -- that may well have delayed things.

Amica gave me two coverage options to choose from:

• $50,000 limit for Liquid Fuel Remediation and $200,000 for the Liquid Fuel Liability Limit. 
• $100,000 limit for Liquid Fuel Remediation for the Liquid Fuel Remediation and $300,000 for the Liquid Fuel Liability Limit.

The estimate was $36 for the first option; we ultimately chose the second option and it added $57 to my annual policy cost.

I needed to answer some questions-by-email about my oil tank and then provide a certificate that I was not previously familiar with.  The questions were:

What is the age of the tank and what type of tank is it?

What is the condition of tank?

Is it an underground tank? 

Is there a monitoring device?

Is this still in use?  

What is the age and the condition of heating system?

How frequently is it serviced and when was the most recent service?

What is the size of the tank in gallons?

          Do you have any other insurance for the tank?

Not particularly difficult questions.  The rep asked for a copy of my "Form 1A."    I was not previously familiar with that one and had to track one down: it's a State of Massachusetts certificate signed by an oil burner technician that certifies that the supply line from your oil tank to your furnace is secure.  (Either enclosed in a non-metallic sleeve, or one of a couple other options.)

We get our oil and burner service from Whitney Brothers in Clinton, and after a quick email to Barry Whitney I had the "Form 1A" in my hands the same day.   (Whitney Brothers is consistently amazing, FYI.)

I emailed my answers and certificate back to Amica, waited a few more weeks, and finally received notification that everything had been approved and we were now covered for escaped fuel.

All-in-all, not a difficult process nor too pricey, and provides some piece-of-mind about a real risk.  If you've been considering adding this to your policy, I hope this helps you understand what you'll need.