Chapter 453 of the Acts of 2008 requires insurance companies insuring one to four family residential property to offer coverage for costs associated with the remediation or clean up of oil or liquid fuel spills.
The purpose of the law is to provide one to four family residential property owners the option to purchase additional insurance coverage for liquid fuel oil that escapes from a fuel system.
A liquid fuel spill can be from a liquid fuel tank, fuel pipes, fuel supply lines or from a system attached to a fuel tank. A fuel spill may damage your home, your personal property, the soil around your home, your neighbor’s land and groundwater. Such spills may require remediation.
Currently the coverage on your policy is limited to liability coverage.
This is sometimes referred to as third party coverage. Typically, this involves liquid fuel spills, usually from a heating system, which leaches off your property or has the potential to leach off your property and cause damage to someone else’s property. Liability coverage may cover the cost to remove the liquid fuel or oil from the soil, and any legal defense costs you may be responsible for in the event of a covered loss. It will not cover any damage to your home of your personal property. Coverage for damage to your home or personal property is often referred to as first party coverage.
When you choose to put the optional escaped liquid fuel coverage, you are purchasing both property or first party coverage and liability or third party coverage.
- The primary advantage of adding this coverage is that it extends first party coverage to protect your home, land and personal property from damage caused by escaped liquid fuel. Without the escaped liquid fuel optional endorsement, you would not have first party coverage for your home and personal property.
- A possible disadvantage of choosing the Escaped Liquid Fuel Oil endorsement is that you may be limiting your coverage for liability (or third party) coverage since the maximum liability limit available is $300,000. This limit may be less than what you currently have under section II, Liability coverage.
Purchasing the Escaped Liquid Fuel Endorsement.
Premiums are determined by selecting coverage limits (for first and third party converge) based on the placement of the fuel oil tank. Tanks can be partially or fully buried into the ground of completely exposed above ground. The chart below shows available choices and the ESTIMATED premiums. If the building has a day care business in it, the liability prices must be doubled. The total of all premiums selected result in the final cost.
Other Considerations:
- Homes Built Before 1990: If you purchase this optional coverage and your home was built before 1990, you will be required to confirm that any fuel or supply lines that touch concrete, dirt or any other type of flooring are enclosed in a non-metallic covering. You must also show that any oil safety shut off valves or other approved release prevention methods are in place and have been installed per the manufacturer’s instructions. Your oil burner service company will be able to help you with these requirements and supply a certificate that you are in compliance with this new law.
- Section II Liability Limits: If your current policy has liability limits above $300,000, and you choose the optional Escaped Liquid Fuel Oil endorsement, you are reducing the limit of liability coverage available to you should a liability claim for escaped liquid fuel occur. In this case, the advantage of choosing the optional endorsement is the additional of property coverage for your home and personal property.
- A Fuel System Means (in the Escaped Liquid Fuel Oil Endorsement): Containers, tanks or vessels which are intended for heating, cooling, cooking or to power motor vehicles and are located on covered real property or an insured location.
- No changes to Personal Umbrella Coverage: If you currently have the Personal Umbrella endorsement on your policy (which is recommended), the coverage’s provided by the Umbrella will not change if you elect to purchase the Optional Escaped Liquid Fuel endorsement. Most companies Personal Umbrella endorsement excludes liability coverage for liquid fuel spills and will continue to do so regardless of whether or not you purchase the Optional Escaped Liquid Fuel endorsement.
- Questions or Concerns: Please contact Austin Insurance Agency with any questions, concerns or to purchase the Escape Liquid Fuel Oil Coverage
NOTE OF CAUTION: No coverage is provided by this NOTICE nor ca this NOTICE be construed to replace any provision of your policy. You should carefully read your policy, and attached endorsements and your declarations page for complete information on the coverage’s and policy limits you are provided. If there is any conflict between your policy, the attached endorsements and the declarations page, THE PROVISIONS OF THE POLICY, AND THE ATTACHED ENDORSEMENTS AND THE CECLARATIONS PAGE SHALL PREVAIL.
