It’s official, the insurance world has turned against single-walled steel heating oil tanks. Every so often the insurance companies update their policies with respect to which risks they are willing to take and which ones they want to steer well clear of. And they appear to make these updates in waves, with one company red-flagging a particular risk and the others following suit one by one. As of early last week there was still one company that does a lot of business in the Northwest Territories that was willing to underwrite single-walled steel tanks, but mid last week their policy changed. Existing tanks under existing policies are grandfathered until the tanks reach the end of their insurable lifespans (approximately 10-15 years – call your insurance broker to confirm the specifics of your own policy), but when you go to sell your house, the buyer will not be able to obtain a new insurance policy without signing a waiver excluding oil spills – an unreasonable risk for any homeowner.
So if you were wondering what upgrades to invest in before listing your home, this one has unfortunately just jumped to the top of the list. Neighbours and friends who are thinking of selling soon would be wise to band together and try to obtain bulk pricing on their new double-walled tanks.
It’s interesting to note that six days ago the Government of Newfoundland and Labrador introduced new rules for heating oil tanks, requiring that everyone upgrade to double-walled (read the CBC article here). Newfoundland and Labrador is of the few remaining Canadian markets that uses home heating oil, and it’s a much bigger one than the Northwest Territories. Could the new rules in Newfoundland have been the straw that broke the camel’s back? It seems probable.