Around this time, those paying the bills for the 650,000 oil-heated homes in Massachusetts probably just received an astronomical bill for that tank full of fuel.
Forewarned of the coming rise in prices for oil, natural gas and electricity, that sticker shock is still a grim reminder of the rising utility costs we’re in for this winter.
But that squeeze on family finances pales in comparison to a homeowner whose failed oil tank spills countless gallons of that liquid gold onto basement floors.
And unfortunately, that’s the dire situation that awaits those who find themselves knee-deep in that dirty, expensive mess.
That’s because only a fraction of oil-heated households — about 7% — have insurance policies that help cover the expensive cleanup of one of those spills.
Although that coverage exists, it does not appear to have been promoted or well publicized by the insurance industry.
Advocates have long pushed for legislation to mandate coverage, instead of an optional rider for existing homeowners’ insurance policies.
It adds about $100 to an annual premium, but without it, homeowners could be liable for thousands of dollars in environmental cleanup costs.
As WGBH reported in March, that’s what happened to Kevin Hurley of East Bridgewater.
In August 2021, Hurley, who was hospitalized with COVID-19, received a message from his son that his storage tank had leaked oil onto his garage floor, despite a recent oil tank inspection showing it was up to code.
When he learned his homeowner’s insurance wouldn’t cover the cleanup because he didn’t buy the optional oil spill rider, he was in shock.
“I was panicking,” he said, “because I don’t have, you know, $200,000, $300,000 or $400,000 to fix it.”
As the WGBH report explained, over time, water and sediment can corrode steel storage tanks from the inside out, which can hide ongoing deterioration even from a trained eye.
Spilled oil can then seep into groundwater, private wells, nearby lakes or rivers, and can also migrate onto neighbours’ properties. It requires careful remediation by trained professionals.
And this is not an isolated event.
The Massachusetts Department of Environmental Protection receives up to 200 such incidents each year.
And this only reflects spills over 10 litres, which must be reported.
Critics of the status quo point out that insurance companies should only “make coverage available” to homeowners. However, many homeowners do not use this option because they are not aware of it.
A bill under consideration, S2830, would provide Massachusetts residents with mandatory property insurance coverage to protect against fuel oil pollution. The state Senate passed the law in the spring, and it is now before the House Ways and Means Committee.
Since 2010, state law has required commercial property insurers to provide coverage for oil heating system leaks; it also requires homeowners to install leak protection systems.
But that protection doesn’t satisfy at least one major insurance trade association.
The Massachusetts Insurance Federation claims the existing law is sufficient, and argues that the proposed bill does not do enough to require tanks to be up to code.
“We are definitely opposed to this legislation as drafted,” said Executive Director Chris Stark.
Stark suggests an alternative course that would increase public awareness about the availability of spill insurance coverage. He also said the state should put the onus on home heating oil delivery companies to provide notice about the law and to take care of any issue with the customer’s heating oil tank.
And homeowners who don’t heat with oil may also oppose this bill, since it would require the cost of the coverage to be spread among all customers, not just those in these affected homes.
Insurance companies often use this general approach, rather than allocating the total premium cost to just those covered by this policy.
In general, we support the intention to provide mandatory insurance coverage for the catastrophic consequences of a residential oil tank spill.
While insurance companies have avoided many costly claims by underselling this protection, that will certainly change if this bill passes.
This will undoubtedly be reflected in future insurance premiums.