The worst part of my job is when I have to tell an insured “you’re not covered for that”. Last Saturday I had to explain to an insured that his oil tank leak was not a covered loss. Experience told me he was looking at an average of $8,000-12,000 to clean up his oil flooded basement, another $2,500 to replace his oil tank, and then the damage to his finished basement and all their personal belongings stored down there. Realistically this will cost him no less than $50,000. No one’s ready to swallow such a loss!

Those who heat their home with oil have an oil storage tank that may be designed to hold 275 to 1,000 gallons. It may be located outside underground or above ground or most commonly, in the basement. When the tank is underground, there is little to alert you that the tank is beginning to leak. In advanced cases, you may smell oil, grass or other vegetation may be dead in the area, water may seep into the tank impacting operation of your furnace, and you may eventually recognize excessive oil consumption. Unfortunately in advanced stages, you would have a very expensive environmental cleanup.

Some homeowners have a conventional oil tank positioned outside. Those tanks often sit with no special concrete apron below as both a base and emergency containment area. These storage tanks are usually “out of sight, out of mind!” Leakage begins with a drip every once in a while, increasing in frequency. Unfortunately, the leak is discovered after gallons of oil collectively dripped into the soil beneath. You’d now be bracing for an $8,000-$100,000 cleanup cost. Our proximity to the Reservoir can inflate those cleanup costs.

Most homes have an oil tank located in a remote corner of the basement. Have you ever thought to check that tank for signs of weakness? A leak is identifiable when there is discoloration (a wet look) at seams, in the belly of the tank, and at the fill or vent piping connections at the top of the tank.  If you wipe with a paper towel, it likely reflects the presence of oil. Other symptoms include staining of the floor beneath and a smell of diesel fuel in the basement. If you find any of those symptoms make sure to have your oil provider inspect your tank. It may simply be that a pipe connection is a little loose which through time has allowed oil to seep through those pipe joints. If you ignore it, you might just wake up some morning to a strong toxic diesel fuel odor. It may include a coating, or inches of oil soaking into everything in your basement.

Homeowner insurance policies almost never cover oil leakage unless you have a policy that specifically is covering your oil tank. The standard homeowner policy excludes losses caused by the “discharge, dispersal, seepage, migration, release, or escape of pollutants.”

It wouldn’t be insurance if there wasn’t double talk in your policy because if the tank is damaged by an otherwise covered peril, coverage would apply. That can be explained better by examples: if the oil leak was caused by your son riding his tricycle in the basement and having struck the protruding line from the tank feeding the oil filter or feed line to your furnace.—you’d have coverage. But if through years of deterioration, your tank side wall separates allowing oil to escape to your basement, then you’ve got a problem.

So how old is your tank? It was likely installed when your home was built. We all know that someday the roof on your home will have to be replaced. So too, your oil tank will need to be replaced. Your furnace servicing contractor should be examining your tank when providing your annual service. Steel tank manufacturers usually provide a 15 year warranty and recommend replacing them at 20 years. Local oil service contractors I have talked with say they are “suspect” of any tank that is over 30 years but always to recommend replacing any tank that is over 50 years old.

So now you’ve learned that your 54 year old tank needs to be pro-actively replaced. Your next question is what options do you have? How much do you need to plan to spend on this project? When should you do it?

You do have options and now the luxury of being able to plan its replacement. Start by getting proposals for installing a new tank; you can have one contractor handle it all or breakdown the project. One contractor might pump out the old oil and sludge, and they then remove the tank. There will be several gallons of sludge that has developed through years consisting of particles settling at the bottom of your old tank.

The next step would be the installation of your new tank. Be sure to consider your options for the replacement tank. The standard inside tank is a single walled 275 gallon tank. You can replace it with 300 or 400 gallon tank to take advantage of any volume oil purchase options. You can also replace it with single or double walled options. The double walled tank has a plastic inner wall and a galvanized metal exterior. These tanks are lighter, carry a 30 year warrantee (compared to the 15 year for a steel tank) and at least one manufacturer (Roth) offers a $2million insurance policy against the tank’s failure.

The installer should be installing your tank to current codes. In earlier installations it was common to install a vent pipe that was smaller than the fill pipe. That allowed tanks to become over pressurized and over filled. You want to be sure a vent whistle is installed so that when your delivery person fills your tank they will be able to tell when the tank is nearing full. Another update you will want to be sure of is the placement of your fuel line between the tank and your furnace. Old ones commonly were covered by cement to protect them from being stepped on or otherwise crushed. However, the lime in the cement ate away at the copper tubing allowing leakage.

If you opt to divide up the project, coordination of the new tank’s installation will be critical. You might end up going without heat or hot water for a few days if not timed right.  Another advantage of replacing the tank proactively is avoiding the demands of winter’s peak heating season. You will pay premium pricing for the contractor to pull their workers to your job and the time lapse between disconnecting your old tank and the final connection of the new may prompt concern for freezing your water pipes.

Keep warm and Safe this winter!