Oil Tank Insurance archived

I could be wrong, but I don't think insurance companies in NJ cover oil tanks anymore. I have State Farm and they do not.

That may be true. My current coverage is based in Connecticut. State Farm, Chubb, and some others do not cover oil tanks in NJ.

Is it in use or decommissioned?

In use.

The current insurance does not allow conversion to gas. If the oil tank is to be covered, a new tank must be installed (inside or outside). I'd have to wait 12 months after installation of the new tank to convert the system to gas. But then I'd have a basically new tank to sell. Annoying!

Ideally I'd like to remove the tank and then go straight to gas. But with this current insurance, it's not an option.

All tank insurance companies have the same requirements.

Think of it this way: Why write a risky policy that you're going to cancel next month?

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composerjohn,

Your oil supplier should be able to provide you with a name or perhaps several names of tank insurers they work with. I use Pro Guard who was recommended by Woolley Oil (my supplier out of Maplewood). They provide coverage for in-ground and basement tanks. I went through the process a couple of years ago of having my underground storage tank (UST) removed and switching over to double-walled Roth tanks in the basement of my rental property. In retrospect, I wish I had made the conversion to gas then. Oil prices went up over $4 per gallon last winter...ridiculous...and most home buyers now don't want to deal with the hassle and risk of either UST's or oil heat in general. Contact Pro Guard but really consider the switch over to gas if you can swing it. It will make your property much more attractive for future sale.

RobB said:

Think of it this way: Why write a risky policy that you're going to cancel next month?

But an above ground/inside oil tank is covered by my homeowners insurance. So I'd still cancel their insurance. I don't see why they care.

They have two options:

a) 1st and 3rd party coverage
b) 1st and 3rd party coverage with voluntary removal

Since I don't know what's happening, I think option b is the better choice. It's actually what I had before the renewal. But, now they decided to raise the price by $160 per year.

shickson said:

composerjohn,

Your oil supplier should be able to provide you with a name or perhaps several names of tank insurers they work with. I use Pro Guard who was recommended by Woolley Oil (my supplier out of Maplewood). They provide coverage for in-ground and basement tanks. I went through the process a couple of years ago of having my underground storage tank (UST) removed and switching over to double-walled Roth tanks in the basement of my rental property. In retrospect, I wish I had made the conversion to gas then. Oil prices went up over $4 per gallon last winter...ridiculous...and most home buyers now don't want to deal with the hassle and risk of either UST's or oil heat in general. Contact Pro Guard but really consider the switch over to gas if you can swing it. It will make your property much more attractive for future sale.

Thanks for your insight. Unfortunately, Pro Guard is what I have now. They have many many restrictions.

Forgot to mention on my previous post: if I elect for option a, then I cannot switch to option b until 2014 (at the earliest). There's a one year waiting period after a lapse in coverage.

PS: this is for a rental property as well.

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We have ProGuard, and we had a leaking underground oil tank. We really needed the insurance, as it paid for most of the costs associated with the removal (for over a year!). But the stipulation that we had to put in another oil tank was awful. I wanted to switch then also but we were stuck. There was no way around it.

If you KNOW and are ABSOLUTELY POSITIVE you don't have any leaks, you can probably get the oil tank removed without the insurance. (But check prices before you do it, cos I don't want to tell you wrong info.) However, if there is any chance at all you might have a leak, you WILL need it. It is expensive if there are problems. And ProGuard? Agreed that they're not that great to deal with, though they ultimately did pay out.

In addition, I would highly recommend avoiding AIM Tank for removal. It's the only situation I've ever had where I had my husband deal with them, despite me being at home and him having a full time job. They just treated me like a dumb woman. Ex: they tried to tell me that duct tape was an acceptable solution for piecing together my newly-installed exterior pipes they broke through, and then told me they didn't actually have to do _anything_ to fix it. And then asked me to move my car. And then walked away while I was still talking to them.

But I'm not bitter.

composerjohn,

When I switched insurance on my Meeker Street property from my primary residence to a rental property I encountered the same problem. Once you go to a rental property no homeowners insurance providers will cover an underground storage tank. They just want out of the business...too much expense. Concerned about future liability I had the tank fully removed by Sterling Environmental. I recommend you do the same. The tank will have to come out eventually. Also, be sure to have the entire tank removed. Don not have it cleaned and filled. Buyers attorneys are now advising their clients not to purchase properties with tanks of any kind even if they were properly decommissioned with supporting paperwork.

Thanks caboose and shickson.

caboose said:

If you KNOW and are ABSOLUTELY POSITIVE you don't have any leaks, you can probably get the oil tank removed without the insurance. (But check prices before you do it, cos I don't want to tell you wrong info.) However, if there is any chance at all you might have a leak, you WILL need it. It is expensive if there are problems. And ProGuard? Agreed that they're not that great to deal with, though they ultimately did pay out.

I am not absolutely positive. Removing it without insurance seems like a very very risky thing to do. I've already searched around for prices with and without insurance. It's about the same. I'll be sure to avoid AIM. So far I've talked with Pierson, Lambardo, and Mike Waters (highly recommended, but not covered by ProGuard!).

shickson said:

When I switched insurance on my Meeker Street property from my primary residence to a rental property I encountered the same problem. Once you go to a rental property no homeowners insurance providers will cover an underground storage tank. They just want out of the business...too much expense. Concerned about future liability I had the tank fully removed by Sterling Environmental. I recommend you do the same. The tank will have to come out eventually. Also, be sure to have the entire tank removed. Don not have it cleaned and filled. Buyers attorneys are now advising their clients not to purchase properties with tanks of any kind even if they were properly decommissioned with supporting paperwork.

I assume Sterling Environmental is covered by ProGuard? What was the approximate price for removal? My tank is a 550 galloon.

Yes, I want the tank completely removed ASAP, but the timing doesn't seem to make sense for this year (unfortunately!). I really wish ProGuard didn't have the 1 year oil tank requirement, otherwise they'd be good to go.

composerjohn,

Yes, Sterling Environmental is a ProGuard approved oil tank removal and remediation vendor. But just to clarify...the insurance only kicks in if there is a leak and remdiation is required. A voluntary tank removal with no leak is not covered by any insurance, its on your dime. That said, a 550 tank removal is not terribly expensive. I would budget roughly $1,500 if my memory is correct. For me that included tank removal and re-patching of my driveway since the tank was underneath it. Also, if I remember correctly, included in the costs was a couple hundred dollar fee for a ProGuard representative to monitor the tank removal to confirm any leakage or lack thereof.

we had proguard on ours and a slight leak when removed. seems like we still wound up paying quite a bit out of pocket for crap that wasn't covered under that policy. testing of soil or something. perhaps a drop (of oil) in the bucket in terms of how much it COULD have cost if the leak was extensive. but, still seemed like i shouldn't have had to pay anything.

shickson said:

composerjohn,

Yes, Sterling Environmental is a ProGuard approved oil tank removal and remediation vendor. But just to clarify...the insurance only kicks in if there is a leak and remdiation is required. A voluntary tank removal with no leak is not covered by any insurance, its on your dime. That said, a 550 tank removal is not terribly expensive. I would budget roughly $1,500 if my memory is correct. For me that included tank removal and re-patching of my driveway since the tank was underneath it. Also, if I remember correctly, included in the costs was a couple hundred dollar fee for a ProGuard representative to monitor the tank removal to confirm any leakage or lack thereof.

Thanks for the info.

The ProGuard fees: $500 for the ProGuard adjuster and a $2500 deductible. So, if I remove the tank and there's no problem, I'm out $500 plus the cost of removal. If the tank is removed and there is a problem, then I'm out $3000 plus the cost of removal. ProGuard won't do approve or cover anything until a new oil tank is installed. That's estimated at $2000 (Roth brand 275 gallon above ground tank).

So at the very least this will cost me $2500 plus the cost of removal (est. $4000). Worst case senario would cost me $5000 plus cost of removal ($6500).

All that money and I can't switch to gas!! If I switch to gas after a year I'll have to pay for the conversation and I'll have new-ish oil tank to sell (assuming I can find a buyer).

To me this almost seems criminal. Sucky!

insombob said:

we had proguard on ours and a slight leak when removed. seems like we still wound up paying quite a bit out of pocket for crap that wasn't covered under that policy. testing of soil or something. perhaps a drop (of oil) in the bucket in terms of how much it COULD have cost if the leak was extensive. but, still seemed like i shouldn't have had to pay anything.

May I ask how much you paid out-of-pocket? Does it sound similar to the numbers I quoted above?

EMC (Environmental Maintenance Company) in Glenside PA just pulled away from my house with my 1000 gallon in-ground tank that they pulled this morning. Ours was a voluntary pull, under Proguard insurance policy, and our costs were exactly what composerjohn quoted too. No leak, thankfully. So we are done today. We had to put the new Roth tank in our basement first. Proguard won't pull out the old until you have the new in place and they won't cover the pull if you switch to gas. Very frustrating, but no way around it that we could find. So we just gritted our teeth and did it. It had been worrying me for years, so I am happy to have that monstrosity off my property!

devpamac said:

EMC (Environmental Maintenance Company) in Glenside PA just pulled away from my house with my 1000 gallon in-ground tank that they pulled this morning. Ours was a voluntary pull, under Proguard insurance policy, and our costs were exactly what composerjohn quoted too. No leak, thankfully. So we are done today. We had to put the new Roth tank in our basement first. Proguard won't pull out the old until you have the new in place and they won't cover the pull if you switch to gas. Very frustrating, but no way around it that we could find. So we just gritted our teeth and did it. It had been worrying me for years, so I am happy to have that monstrosity off my property!

Thank you for confirming! It seems I don't have much of a choice. ProGuard has cornered the market and set the terms.

Are you planning to switch over to gas in a year?

Does it have to be a new tank? Couldn't everyone who is looking to convert to gas just pass a tank around the neighborhood?

I just had my tank pulled under Proguard, and I wasn't thrilled about staying with oil, but face it ... Proguard is funded by the heating oil industry and it's understandable that they will do everything legally possible to make you stay with heating oil. Why would they put themselves on the line for possibly hundreds of thousands of dollars in remediation costs just to see you walk away as a customer? They are the only game in town, and I for one am grateful that they exist, since homeowner's insurance rarely covers tank leaks any more. It's not that they've "cornered the market." It's that they're the only ones who are willing to take that market.

I also used EMC and was very happy with them. If I hadn't had Proguard, I would have used Mike Waters. (He's not on their list of approved vendors.)

I was surprised to see the inspection fee is $500. It was $200 when I had it done earlier this year. Guess they raised their rates.

You can easily find a buyer for a recent, lightly used Roth double-wall above-ground oil tank.

There have been several good threads on the subject in recent months:

http://forum.maplewoodonline.com/vc/discussion/82073/
http://forum.maplewoodonline.com/vc/discussion/81345/
http://forum.maplewoodonline.com/vc/discussion/81236/
http://forum.maplewoodonline.com/vc/discussion/81081/
http://forum.maplewoodonline.com/vc/discussion/80856/
http://forum.maplewoodonline.com/vc/discussion/80598/
http://forum.maplewoodonline.com/vc/discussion/80449/
http://forum.maplewoodonline.com/vc/discussion/80096/
http://forum.maplewoodonline.com/vc/discussion/79959/

Proguard now offers voluntary pull coverage at a higher premium. That's what I'll be electing.

I remember when I was removing my oil tank, I wanted to use Sterling and they were not covered by ProGuard (they used to be, then were dropped). There were a lot of positive recs on this board for them though. Of course, not sure about currently.

Can you really sell a Roth tank? I've got two and I want to switch to gas! My plan was to wait out the year and then switch, but of course it hasn't happened yet. That's how they get you.

Our pull required quite a bit of remediation, a few different digs to confirm lack of oil in the soil, and it was 10s of 1000s of dollars. So yes, we paid some out of pocket, but it was totally worth it to have the insurance.

(and you have no freaking idea how much it pains me to say that!)

caboose said:

Can you really sell a Roth tank? I've got two and I want to switch to gas!

I bought mine from the MOL classifieds and had Woolley install them. They seemed a little surprised -- I guess it doesn't happen that often -- but they did it, no questions.

I had room for one big tank, which is what I intended to install, but I bought two smaller tanks (165 gallons each) when the opportunity presented itself, but the piping to connect the two tanks turned out to be quite a bit more complicated and expensive than I realized, so my saving weren't all that great, compared to if I'd found a single big tank.

kthnry said:

You can easily find a buyer for a recent, lightly used Roth double-wall above-ground oil tank.

Really? A quick search on Craigslist only turned up 2 or 3 used tanks in NJ. And they weren't even the exact type that I'd need to sell. I won't assume this will be easy.

kthnry, I think you were lucky to find a local seller. My oil company it'll take some work.

composerjohn said:

kthnry, I think you were lucky to find a local seller. My oil company it'll take some work.

A lot of people just don't think of selling their tanks. Or they have older tanks that nobody wants. The person I bought them from had a bunch of responses. I was lucky to be first, but she had quite a waiting list if I didn't work out.

A friend of mine had her house up for sale. Did not get any offers even though it said before closing the underground oil tank would be removed;she lowered the price and did improvements/upgrades, and no sale. She removed the oil tank and put an above ground one in and the house sold within a couple of week. I would have it removed even if you have to have an above ground oil tank for a year. She was told nobody wants the used tanks as it is hard to get insurance on them.

I looked in to a used tank but the hassle of finding someone to install wasn't worth it. Instead we opted for a non-Roth tank, as the whole double walled thing seemed unnecessary in our dry basement (was advised as much by at least two different oil companies). Was only like $1200 from LEW Corp (pro guard approved, also handled our removal), less sunk cost should you decide to switch to gas down the line.