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3 Steps To Protect Your Home From Oil Tank Damage and What's covered by insurance

Abandoned Oil TankAbandoned Oil Tank (Photo credit: massmatt)

Oil is a popular fuel source for heating, heat pumps/air conditioning. During the summer months, we aren't thinking of heating too much, and it's not unusual for people to just forget about the tank unless something goes wrong...

Can an Oil Tank Leak Really Cause That Much Damage In My Home?

According to The IBC,

  • One litre of leaked oil can contaminate 1 million litres of drinking water.

  • A pinhole in your tank can empty 1,000 litres of oil.

  • Cleanup of an oil spill can involve everything from replacing the tank and supply lines and removing contaminated soil, to replacing your home’s foundation.

 

Who Pays for damage resulting from an oil tank leak or spill?

 

If you have an oil tank and it leaks out due to a malfunction, maintenance or simple wear and tear you are responsible for the damage caused, not only to your own property but to the surrounding areas (such as your neighbours property) if it spreads. I have seen claims where people had an oil tank and it leaked causing damage to the neighbouring land - these situations are very stressful and require experts to come in and do soil evaluations as well as specialized removal and other tests.

 

Outdoor and Underground Oil Tanks

Note: 

Outdoor oil tanks must be declared to insurance companies because of the fact that they have a higher incidence of leakage, corrosion and spills.

If you have an underground oil tank, or are considering buying a property with an underground oil tank, call your insurance company first, many insurers will not insure a home with an underground tank (even if it isn't being used). Underground tanks should be removed and never left to "rest" on the property.

 

3 Steps in Prevention

How to make sure your oil tank is safe:

  1. Make sure your tank is installed properly by a professional and is ULC or CSA certified. Poor installations are a major cause of damage. Never purchase a used oil tank - the risks associated with taking an old tank are high. The most serious damage to oil tanks (and hot water tanks) occur from the inside out.
  2. Have your furnace and tank professionally checked and serviced at least once a year. Make sure they change the filter, inspect the integrity of the tank, and remove any excess water or sludge to avoid/reduce corrosion. 
  3. Don't wait for a problem before you replace the tank.  The average recommended time line to replace a tank is about 10 -25 years depending on the tank itself and its location  - make sure to check the specifications for maintenance and expected lifespan for your tank specifically. Even 10 years sounds like a safe number, but if we look at the data in this study (p.6), there is a very high incidence of damage and claims from oil tanks in the 6-10 year range - up to 44% of claims.  That's not a small number. 

Just because you have home insurance, doesn't mean you are covered for oil damage!

Every home policy is different, however in many cases there is no coverage included in your policy.  Many insurers offer an option to add the coverage up to a certain limit on your policy for a small charge. Having this coverage could help you dramatically in the event of an incident, so please be sure and contact your insurance provider and ask them if this is available to you, and find out what your policy will provide you with.

Bonus step: Add Oil Coverage With Your Insurance Company

Those are three easy steps to reduce risk and keep your home safe from oil damage. Even in the best of conditions, things sometimes go wrong, so your bonus step is to make sure and call your insurance company and ensure you add coverage wherever possible for damage resulting from the use and ownership of an oil tank.The coverage is usually not expensive - a few dollars a month, and well worth investigating.

Summer Tip:

Did you know its recommended to keep the oil tank mainly full during the summer to minimize condensation?

 

Taking care of this now will save you money and a lot of problems later!

If you've had an oil spill, I'd love to hear what your experience was, and  if there was anything you  would recommend to prevent spills in the future. 

You can share your story in the comments below!

  • Do you have an oil tank at home?
  • When was the last time you checked it?

 

 

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