Discussionspublic

Regulations

This is a public Forum  publicRSS

Topic

    EdG
    Oil Spill Coverage Required in Homeowner's Insurance
    Topic posted April 26, 2011 by EdGElite Contributor, last edited March 15, 2012
    937 Views, 11 Comments
    Title:
    Oil Spill Coverage Required in Homeowner's Insurance
    Content:

    Chapter 453 of the Acts of 2008 requires that every insurance carrier in MA offer homeowner's insurance coverage to include remediation, assessment, property damage, third party claims and defense costs for releases of oil from oil tanks, fuel lines, pipes, equipment, or systems connected to the fuel tank.

    $50,000 per occurrence for on-site (first party costs) and $200,000 for third party claims is the mandatory offering.

    Why is this important? 

    First, over 300 residential fuel oil spills are reported annually to the MassDEP.  When groundwater is involved costs can average $250,000 or more.  That amount can be catastrophic to the average homeowner.

    Second, lenders that foreclose on properties can use the policy to pay for unwanted cleanups - See Larry Schnapf's post on Southbridge Savings Bank incurring $4,000 by foreclosing on residential home with oil leakage.

    File:
    Environmental Risk in Residential Properties published in RMA Journal.pdf (500KB)

    Comment

     

    • Martin Bermudez, CHMM
      posted April 27, 2011 by Martin Bermudez, CHMMMember

      Does the act make a distinction betwwen claims-made and occurence policies?   What are they typical premiums for the mandatory offering?

    • Show/Hide Replies
      EdG
      posted April 27, 2011 by EdGElite Contributor

      Most homeowner's policies are on occurrence forms.  Attached is a Prestige Sample Endorsement and separately a rate form from Fireman's Fund.  The rates look to be between $124-$500.

      Fireman's Fund Rate Form.pdf (48KB)
    • kevin
      posted April 28, 2011 by kevinSuper Contributor

      all the more reason to distribute natural gas in MA. 

    • EdG
      posted April 28, 2011 by EdGElite Contributor

      So you can have house explosions and higher heating bills....  You should read about all the National Grid man-hole explosions in greater Boston area.

      I am all for natural gas (see LINN Energy for good stock tip).  But it never seems to be one clear answer.

    • Tom Speight
      posted May 3, 2011 by Tom SpeightElite Contributor

      We're doing a remediation job for a trailer park co-op where one of the homes' AST leaked for a unknown period of time.  The tank was in a concrete basin, but the basin leaked too.  The release was discovered last summer.  So far we have a 16' deep hole and recurring GW contamination in fractured bedrock, within the protective radius of the trailer parks' water supply wells.  If we still have GW contamination above drinking water standards by our one-year date in October, the site will default to a Tier 1 (direct DEP oversight) release, which will be expensive.

      The co-op corporation that owns the place is picking up the bill at the moment, but their pockets aren't very deep-- this is an over-55 community.

      Granted, this isn't a typical homeowner problem, but it's a good example of how bad things can get.  Outdoor ASTs for residences are a bad, bad idea.

      I'm trying to accrue Good Karma Points by instructing the residents there on how to inspect their tanks, etc. to try to help prevent this from happening again.  As it is, in 1998 the co-op required all the residents to either replace their tanks or install a basin.

    • Show/Hide Replies
      ECSECLIPSE
      posted March 11, 2012 by ECSECLIPSEMember

       This is interesting news. I am a homeowner in MA myself. 

      • Tom Speight
        posted March 12, 2012 by Tom SpeightElite Contributor
         You don't need to worry-- you have Dan Felten's phone number;)
        • ECSECLIPSE
          posted March 13, 2012 by ECSECLIPSEMember
           That's correct. Are you familiar with ECS and all our wonderful services? Thanks Tom!
          • Tom Speight
            posted March 13, 2012 by Tom SpeightElite Contributor
            Yup. I work for Pioneer, just across the river. I have eyestrain whenever I have to read one of Paige's reports with his billion footnotes. :)