Comfort Line - Oil Tank Leaks
Oil Tank Leaks by Charles J. Brand This quarter our questions and answers segment discusses the costs and ramifications of an oil tank leak.How much does it cost to clean up the contamination caused by an oil tank leak?
It can vary depending upon the severity of the leak, the topography of the land , the proximity of bodies of water, etc. The cost of an average clean up is approximately $7,500.
Does my homeowner’s insurance cover oil tank leaks?
In order to understand the answer to this question we need to explain the difference between first party coverage and third party coverage. First party coverage deals with a leak and subsequent clean up that is confined to your property. Third party coverage deals with a leak and subsequent clean up that spreads to your neighbor’s property. Under New Jersey case law, the definition of third party coverage also includes the clean up of groundwater, even if it is limited to your property.
Homeowner’s insurance policies generally contain a provision that excludes first party coverage. Therefore, your homeowner’s insurance will pay only for the portion of the clean up which relates to the following:
- Groundwater impact on your property.
- Contamination that has migrated to your neighbor’s property.
Do homeowner’s insurance companies charge extra if I have an underground tank?
Recently, some homeowner’s insurance companies have begun adding a surcharge for homes with underground tanks.
I have ProGuard Environmental and Tank Protection Coverage through Hart & Iliff. What does ProGuard cover?
ProGuard provides $100,000 of environmental clean up coverage and $1,400 in tank replacement coverage in the event of a sudden and accidental release. ProGuard covers only first party claims. Your ProGuard coverage, in conjunction with your homeowner’s insurance, generally covers both first and third party claims.
I have heard about a state program that pays for the replacement of underground tanks. How does that program work?
The State of New Jersey has a Petroleum Underground Storage Tank Remediation Upgrade and Closure Fund (UST Fund). Grants are available under this fund to pay for the clean up of a leaking underground tank and the cost of installing a replacement tank. You must meet the following criteria to qualify for a grant under the UST Fund:
- Your tank must be leaking.
- Your net income must be less than $200,000 per year.
- Your net worth, not including the equity in your house and qualified plan funds (e.g., 401(k) or IRA) has to be less than $200,000.
Should I replace my old tank?
One thing we know for sure is that nothing lasts forever. If your underground or aboveground tank is more than 30 years old, it’s probably a good idea to consider replacing it. Hart & Iliff can handle the whole job for you, including removal of an underground tank and installation of a new tank. In our opinion, the Roth double wall tank that we distribute and install is the best and most cost-effective replacement tank on the market today. Call us at 973-383-1421 for details.
