Do I Need Tank Insurance?

As the old adage goes, out of sight out of mind. Unfortunately, this can be a dangerous and costly idea to follow when it comes to insurance. Insuring your tank that is buried underground is probably not in the front of your mind, but it probably should be. Just as you would not buy a house or a car without insuring it, it’s not wise to buy an underground tank without insuring it. Not only is it wise, it’s also a legal concern in Massachusetts.

What Constitutes an Underground Tank?

This seems like a simple question to answer. However, any tank that has at least 10 percent of its total volume underground is considered to be an underground tank. Since 1985, the EPA has been developing a regulatory program which controls how underground storage tanks are used. Part of this regulation includes insurance coverage to provide for the necessary reactions to a spill or leak.

Why Do I Need Tank Insurance

You need underground tank insurance because of the exorbitant expenses associated with cleaning up a potential leak. If a tank starts to leak harmful liquid into the surrounding environment, it can cost tens of thousands of dollars to address. There have even been instances where an underground storage tank leak has cost over $1,000,000. This is true of residential heating oil tanks as well as commercial underground storage tanks.

Double Check What Your Homeowners Insurance Covers

You need to make sure that your homeowners’ insurance policy covers you in the event that you have a leaking tank, and doing so is becoming an increasingly difficult task. Many homeowner insurance companies are attempting to exempt leaking underground storage tanks from coverage. You need to read your policy and see whether or not leaking underground tanks, or damage stemming from leaking underground storage tanks is covered.

Massachusetts State Laws

Over the past few years Massachusetts has passed new laws that increase standards regarding underground tanks. Part of this new legislation is that insurance companies which provide homeowners insurance are now required to offer coverage for leaks from oil based heating systems. However, many homeowners policies do not cover tanks as part of their basic policies, so it needs to be added on.

How Much Insurance Coverage is Required?

Insurance required for tank leak liability is $50,000 for “first party coverage.” This will help cover the costs of cleaning up oil leaks, indoor air, or other issues occurring on the property itself. $200,000 is required for “third party coverage” which deals with damage off the offending property. For example, this could include a neighboring house or surrounding ground water.

Leaking tank problems can be devastating if you do not have proper insurance. Want to learn more about how underground tank storage units are insured? Contact the H&K Insurance Agency in Watertown, MA today to learn more about homeowners insurance as well as life and personal insurance. We can provide you with a free quote on these policies or any others than may apply to you.