Massachusetts Oil Heat: Leak Coverage Insurers Must Offer

I see a lot of oil heat in the older houses around Greater Boston, and there are two Massachusetts laws that come with it. Most people I talk to haven’t read either one, so here’s a plain walk through both before the burner comes on for the season.

The coverage your insurer has to offer

Under c. 175, § 4D, every insurer licensed to write and actually writing homeowners insurance in Massachusetts, and the joint underwriting association, has to make heating oil leak coverage available to owners of one to four unit homes. The minimums are $50,000 per occurrence for first party property, which is the cleanup on your own land and inside your house, and $200,000 per occurrence for third party liability and legal defense costs. The deductible can’t exceed $1,000 per claim. First party coverage includes the response costs to assess and clean up oil that has reached soil or indoor air on your property. Third party coverage defends you and pays response costs on and off your property when a release has reached groundwater or a neighbor’s land, or is likely to. When both apply, they apply together.

Ask whether it’s actually on your policy

The statute says the coverage shall be made available, and that insurers may charge reasonable premiums for it. So it’s something they have to offer you, and you may have to pay for it. Whether it’s actually on your policy is a question for your insurance agent, and I’d get the answer in writing. It’s a good call to make in September rather than in January.

The line under the tank

The second law is c. 148, § 38J, and it’s about prevention. If your heating oil tank (the law covers tanks in the house, at or below grade, or outdoors, but not underground tanks) has a fuel supply line or return line in direct contact with concrete, earth or another floor surface, you have to do one of three things: enclose the supply line in a continuous non metallic sleeve, have an oil safety valve installed at the tank end of the line to the manufacturer’s instructions, or use another release prevention method the state board of fire prevention regulations has approved. An oil safety valve, in the statute’s words, is a device that prevents the flow of oil if a fuel supply line breaks. None of this is required if the burner sits above the tank and the entire supply line runs from the top of the tank and stays above it.

The 1990 exemption and the certificate

The supply line rule doesn’t apply to a tank whose supply lines or safety valve were installed or upgraded on or after January 1, 1990, as long as the work met the state fire code and a licensed oil burner technician inspected it and certified it on a Department of Fire Services form that was submitted to the local fire department. Any upgrade done to satisfy the rule gets the same treatment: a licensed technician inspects and certifies it, and the owner files the form with the fire department, which forwards a copy to the state. Hang on to your copy, because you’ll want it for the insurance side too.

Where the two laws meet

The insurance statute lets an insurer require proof that the supply line rule has been met before it issues the leak coverage. So the technician’s certificate does double duty. It keeps you inside the fire code, and it’s what the insurer may ask to see. If you’re buying a house with oil heat this fall, ask the seller for a copy of that form the same way you’d ask for the smoke detector paperwork, and have your inspector look at how the line runs from the tank to the burner.

Looking at a house with oil heat, or own one and never checked the policy? Send me the address and I’ll tell you what to ask for. Diana Kim, REALTOR®, eXp Realty.