Outdoor Oil Tanks and Homeowners Insurance

Maine’s DEP recently issued a statement warning homeowners who have outside oil tanks to take steps to prevent leaks. During a recent Channel 6 news piece, Peter Blanchard from the Maine DEP explained that snow and ice dropping from the roof can cause the nipple to break between the oil filter and the tank.

Approximately 80% of Mainers heat their homes with oil. It is unknown how many of these oil tanks are outdoors. The DEP recommends installing a shield over the filter to protect it from damage. They’ve even produced a video about it. This is more than a good idea; homeowners with outside oil tanks are required by code to have a protective shield.

Blanchard points out that his department responds to almost 500 oil spills every year. Cleanup costs can run from $10,000 to over $100,000. By contrast, oil tank covers cost about $75.00.

What if the worst happens? Does your homeowners policy cover you? Our agency has not had such a claim, so we don’t have any “real world” experience to report. However, most homeowners policies exclude pollution damage unless it’s caused by one of 16 named perils. “Weight of ice and snow” is only a covered peril for property located INSIDE a building. That doesn’t sound promising. “Falling objects” is another covered peril. Would an insurance company consider snow dropping from a roof to be a “falling object”? Who knows for sure. The New York Insurance Department is equally unsure. So, we agree with the DEP’s advice: $75.00 worth of prevention is worth $100,000 of cure.

For more information, call the DEP at 1-800-482-0777.