Home Oil Spill Coverage and Clean up and Protection

Picture this nightmare scenario – you go down into your basement to do laundry and discover your oil tank has leaked gallons of oil into your home. Then the nightmare grows as you discover that damages, along with cleaning up your house, and ground testing is not part of your insurance coverage.

Shock and anger would be an understatement that it is not covered! Most 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.

There are bills being discussed that would mandate coverage for damage caused by heating oil leaks. The insurance industry is not there just yet. However, there is a relatively inexpensive insurance endorsement available to homeowners that covers the damage and cleanup. The Escaped Liquid Fuel Endorsement. Please note this endorsement is not available in all states.

Why wouldn’t this be covered on every homeowners insurance policy?

Because not every home is heated by oil, home insurance policies typically do not cover fuel contamination of personal property, groundwater, and a neighbor’s property.

How much would it cost to clean up my property from a home heating oil spill?

The cost of residential oil spill remediation is typically quite costly. The cost for damage clean up could be anywhere from $10,000 to more than $100,000. Many variables come into play if an oil leak happens in a home. Did the oil seep into the ground water? Did it seep into a neighbor’s property? Did it contaminate any adjacent protected land or waterways? Unfortunately, many do not know the answer until disaster strikes, which is why it is strongly encouraged to be proactive from the start.

What should I do if I have an oil tank in my home, or I am considering buying a home with an oil tank?

One of the first things that homeowners or homebuyers should know is whether there are any old or damaged tanks on the property as well as getting a sense of the structural integrity and age of the oil tank currently in operation. If you are purchasing a home with an oil tank, some experts suggest having your property inspected to make sure there are no other tanks potentially buried on the premises. It is also recommended to have the operational tank inspected for any wear and tear.

How can I protect myself if I heat with oil?

If you heat with oil, you have the risk of an oil leak. Consider purchasing an “Escaped Liquid Fuel Endorsement”, also known as Oil Remediation coverage for your policy if you haven’t already done so.

How much does the Escaped Liquid Fuel Endorsement cost?

The price for this endorsement ranges between $50-$100 annually on average depending on the amount of coverage you purchase and your carrier. 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.

We know all the different coverage options can be confusing. If you heat with oil, but have not yet talked with us about obtaining oil remediation coverage, contact us at Bearingstar today to discuss available options. We are here to help and guide you.

1. Lannan, Katie. Insurers fighting bills that would mandate coverage for damage caused by heating oil leaks. MetroWest Daily News. 10.23.21 https://www.metrowestdailynews.com/story/news/2021/10/23/bill-would-mandate-insurance-coverage-home-heating-oil-tanks-damage/6133019001/