Editorial: Senate bill ensures oil spills insured

About this time, those who pay the bills for the 650,000 Massachusetts homes that heat with oil probably just received an astronomical invoice for that tankful of fuel.

Warned in advance of the coming surge in prices for oil, natural gas and electricity, that sticker shock's still a somber reminder of the soaring utility costs we're in for this winter.

But that squeeze on family finances amounts to a mere pittance compared to a homeowner whose failing oil tank dumps countless gallons of that liquid gold on basement floors.

And unfortunately, that's the dire situation that awaits those who find themselves knee deep in that dirty, expensive mess.

That's because only a fraction of oil-heated households — around 7% — have insurance policies that help cover the costly cleanup from one of those spills.

Though that coverage exists, it apparently hasn't been promoted or well publicized by the insurance industry.

Advocates have long pressed for legislation to mandate coverage, instead of an optional rider to existing homeowners' insurance policies.

It adds about $100 to an annual premium, but without it, homeowners could be liable for thousands of dollars in environmental cleanup costs.

As WGBH reported in March, that's what happened to Kevin Hurley of East Bridgewater.

Back in August 2021, Hurley, hospitalized with COVID-19, received word from his son that his storage tank had leaked oil onto his garage floor, despite a recent oil-tank inspection that showed it was up to code.

When he learned his homeowner's insurance wouldn't cover the cleanup because he hadn't purchased the optional oil spill rider, he was in shock.

"I was in a panic," he said, "because I don't have, you know, $200,000, $300,000 or $400,000 to fix it."

As the WGBH report explained, over time, water and sediment can corrode steel storage tanks from the inside out, which can conceal ongoing deterioration, even from a trained eye.

Leaked oil can then seep into groundwater, private wells, nearby lakes or rivers, and also could migrate to neighbors' properties. That requires careful remediation by trained professionals.

And it's not an isolated occurrence.

The Massachusetts Department of Environmental Protection receives up to 200 of such incidents every year.

And that only reflects spills exceeding 10 gallons, which must be reported.

Critics of the status quo point out that insurance companies need only to "make available" coverage to homeowners. However, many homeowners don't exercise this option because they're unaware of it.

A bill under consideration, S2830, would provide Massachusetts residents with mandatory property insurance coverage to protect against fuel oil contamination. The state Senate passed the law in the spring, and it's now before the House Ways and Means Committee.

Since 2010, state law has required commercial property insurers to provide coverage for oil heating system leaks; it also requires homeowners to install leak-protection systems.

But that safeguard doesn't satisfy at least one major insurance trade association.

The Massachusetts Insurance Federation asserts the existing law is sufficient, and contends the proposed bill doesn't do enough to require that tanks be up to code.

"We are adamantly opposed to this legislation as drafted," said Executive Director Chris Stark.

Stark suggests an alternative course that would increase public awareness about the availability of spill insurance coverage. He also said the state should put the onus on home heating oil delivery companies to provide notice about the law and take care of any issue with the customers' heating oil tank.

And homeowners who don't heat with oil also may oppose this bill, since it would require the cost of the coverage be spread among all customers, not just those in these affected homes.

Insurance companies often use this blanket approach, rather than assigning the total premium cost on just those covered by this policy.

In general, we support the intent of providing compulsory insurance coverage for the catastrophic consequences of a residential oil tank spill.

While insurance companies avoided many costly claims by underselling this protection, that's sure to change if this bill passes.

That will undoubtedly be reflected in future insurance premiums.