To Buy or Not to Buy...Oil Tank Insurance ?

How not being 'penny wise, pound foolish'

saved this writer $50,000

By Victoria Secunda

nyone who's ever bought a house knows the money jitters that can set in before the moving van guys have even finished unloading—the sense that you're a heartbeat away from debtors' prison.  That's how my husband and I felt after we closed on our home in Connecticut in 1994. We needed everything—window shades, a basement office, new towels—and our credit  cards were on fumes.  So when my friend Janice said, "Did you get oil tank insurance?" I  laughed.   "Surely, you jest," I replied.  "One more bill and my husband will leave me."  

       I knew from the home inspector's report that our oil tank was buried under the front walkway.  With ostrich-like, new-homeowner logic, I figured  that  since I couldn't actually see it, it had to be okay.  But Janice kept  nagging me about this policy.  "If you don't protect yourself," she said ominously, "it could wipe out your entire nest egg."  To get her off my back—and on the off chance that she was right—I made some inquiries and  found that I could get a Tank Protection Policy for a mere $59, and I signed on.  

       A couple of years later, I read an article about real estate values being jeopardized by in-ground oil tanks.  Then our furnace began making belching noises reminiscent of the Titanic going down Our oil company suggested we get a new oil tank, to be installed in the basement  (i.e., above ground), the price of which, including the removal of the old tank, would be  $2,500—assuming, that is, that the old tank was intact—and so we gave the go-ahead.  

      On a snowy day in February of 1997, the tank digger-upper we had hired—let's call him Hank—drove his bulldozer onto our driveway, chugged to a  point 15 feet from our doorway, where the intake pipe was located, and began  to chomp away at our lovely brick walkway. Roughly 45 minutes later, he attached a long chain to the exposed tank, winched it out of the ground, and,  in triumphant tones, screamed,  "It's a leaker!"   

      My husband and I rushed outside and peered into the hole Hank had dug. It  was swimming in black oil.  Terms such as "cleanup,”  "contamination," "water  table," "Environmental Protection Agency," "Fire Marshall," and "fill" fell trippingly off Hank's tongue.  It could cost, he added, anywhere from $20,000 on up to solve the "problem," depending on whether or not oil had traveled  (yes, oil can "travel" underground) to neighboring properties.   

       Hank must have noticed our gasping, ashen faces.  "Say," he helpfully inquired as he dialed his cell phone to report our "leaker" to the Fire Department, "you got tank insurance?"   I ran indoors and read our policy,  which stated that the insurance would cover all cleanup expenses up to  $100,000, but that anything more would be on our nickel.   

       The next weeks were a nail-biting waiting game as more machines arrived,  and more of our front property was dug up and hauled away in truck after  truck.  As soil tests continued to show oil contamination, the chasm at our  front door  grew into a crater 20 feet straight down and 40 feet across the  driveway.  Finally, a report came back saying that we were "clean" and that  the new  fill, walkway, and driveway could be installed.  Cost to the insurance underwriters: $55,000.  Cost to us: $2,500 for the tank removal and  replacement, as originally planned, plus $59 for the insurance policy.  

       I cannot count the times since then that I have thanked Janice for  rescuing us.  I have spread the word up and down our street to other  homeowners, most of whom also didn't have tank insurance, and who, having  seen the abyss that had been our driveway, quickly got their own policies (and replaced their own "leakers" for a relative pittance).  

        Moral of the story: There are times in the life of a homeowner when  little things—in this case, an inexpensive insurance policy—mean a lot.  If  your home is heated by oil, skip the new towels and spend the money on tank  insurance, instead.  It could be the best investment you ever made.

_______________________________ 

Victoria Secunda is the executive editor of

MAKING BREAD magazine.

E-mail this article.