Homeowner Oil Heating System Upgrade
and Insurance Law
This fact sheet contains important information for those who heat
their homes with oil. By July 1, 2010, unless
exempt, you must upgrade your home heating system equipment
to prevent leaks from tanks and pipes that connect to your furnace.
By making a relatively small expenditure now, you can prevent a
much greater expense in the future.
Massachusetts has a new law to address oil leaks from home heating
systems (see
Chapter 453 of the Acts of 2008). This law has two major provisions
that require:
- the installation of either an oil safety valve or an oil supply
line with protective sleeve on systems that do not currently have
these devices; and
- insurance companies that write homeowner policies to offer coverage
for leaks from heating systems that use oil.
Most homeowner policies do not currently include such coverage,
leaving many to pay for costly cleanups out of their own pocket.
Although it is mandatory that insurance companies offer this coverage,
the insurance is an optional purchase for homeowners. The effective
date for both provisions is July 1, 2010.
Who must take action?
Owners of 1- to 4-unit residences that are heated with oil must
already have or install an oil safety valve or an oil supply line
with a protective sleeve, as shown in the diagram above. Installation
of these devices must be performed by a licensed oil burner technician.
Technicians are employed by companies that deliver home heating
oil or are self-employed. It is important to note that heating oil
systems installed on or after January 1, 1990 most likely are already
in compliance because state fire codes implemented these requirements
on new installations at that time.
Who is exempt?
Homeowners are exempt from taking these leak prevention steps if:
- the oil burner is located above the oil storage tank and the
entire oil supply line is connected to and above the top of the
tank OR
- an oil safety valve or oil supply line with protective sleeve
was installed on or after January 1, 1990, AND
- those changes are in compliance with the oil burning equipment
regulations; a copy of the oil burner permit from the local fire
department may be used to demonstrate compliance.
Why comply?
Not only is complying with the new law required, it makes
good financial and environmental sense. Homeowners who take these
preventive measures can avoid the disruption and expense that can
be caused by heating oil leaks. A leak may result in exposure to
petroleum vapors in your home. If the leak reaches the soil or groundwater
beneath your house, then a cleanup must be performed to restore
your property to state environmental standards. Leaks that affect
another property or impact drinking water supply wells can complicate
the cleanup and increase the expense. Each year, several hundred
Massachusetts families experience some kind of leak.
What will an upgrade cost?
The typical cost of installing either an oil safety valve or oil
supply line with a protective sleeve ranges from $150 - $350 (including
labor, parts, and local permit fees).
What could it cost to cleanup a leak?
The cleanup cost for a “simple” leak can be as much
as $15,000. In cases where the leak impacts the groundwater or is
more extensive, the cleanup costs can reach $250,000 or more.
What kind of insurance is available?
To be eligible for the new insurance coverage, homeowners must ensure
that their oil heating systems are in compliance with the new law.
Homeowners who have been certified to be in compliance with (or
exempt from) the leak prevention measures qualify to purchase insurance
that:
- provides “first party coverage” of at least $50,000
for the cost of cleaning up a leak to soil, indoor air, or other
environmental media from a home heating system at the residence
itself and reimbursement for personal property damage, AND
- provides “third party coverage” of at least $200,000
for the cost of dealing with conditions on and off the insured’s
property because the leak from this system has or is likely to
impact groundwater or someone else’s property. The coverage
also includes costs incurred for legal defense, subject to a deductible
not to exceed $1,000 per claim.
What should I do next?
- Determine whether you have had an oil safety valve or new oil
supply line with protective sleeve installed since January 1,
1990. If you have, your permit from the fire department for the
installation can be used to document your compliance. You can
request a copy from the fire department if the permit is on file,
or a licensed oil burner technician can certify that status on
a form.
- If you do not have an oil safety valve or oil supply line with
protective sleeve in place, have one or the other installed and
certified. Either contact your oil delivery company to ask if
they employ a licensed oil burner technician or find a service
person in your area. (A list of licensed technicians can be viewed
at http://db.state.ma.us/dps/licenseelist.asp.
Click on the “individuals” tab, scroll down to and
then select “Oil Burner – Technical Certificate”
in the “select a license type” box, type in your city
or zip code, and click “select”).
- Consider buying insurance coverage for the cleanup of a leak.
- Determine whether your existing policy provides oil leak
coverage.
- If it does not, consider calling your homeowner insurance
agent to amend the policy to include this coverage.
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