Fuel oil tanks

The Risk

Oil leaks and spills from residential fuel tanks have cost Canadian insurance companies and homeowners a lot of money in recent years. Insurance companies now balk at insuring homes with older fuel tanks, and some provinces have passed strict new regulations governing when the tanks must be replaced.

Real estate transactions can be put at risk if you purchase a property with an underground fuel oil tank and are denied homeowners insurance. If you find that an existing tank has not been registered, remedial action may cost thousands of dollars.

Homebuyers have also expressed concern over home insurance policies being denied or being unable to obtain home insurance because of the age of both under and above ground oil storage tanks. A home with an exterior oil tank older than 15 years, or an interior tank older than 25 years, usually will not be insured.

The Problem

The problem is that many oil tanks are corroding from the inside out, so the failure is not readily visible. This often occurs from condensation that builds up inside the tank. Since oil is lighter than water, the water goes to the bottom of the tank and causes corrosion. The first sign of a bad tank could be an odour of oil in the air. There might be rust or corrosion where the legs are welded to the tank. It could also be the fuel filter that begins to leak or a nozzle plugging that could be a symptom.

Insurance companies are concerned that an old oil tank will leak and spill hundreds of litres of heating oil into the home, or into the ground. Spilled oil can quickly contaminate soil and groundwater. If the leak finds its way into a sump pump or floor drain, the spill will undoubtedly make it a very expensive cleanup. With outside storage tanks, where rust and corrosion are more common, a spill can contaminate the soil or make its way into nearby streams or rivers.

Indoor Oil Tanks

Many home oil tanks are designed and built for indoor use. Indoor oil tanks will generally last longer and improve the efficiency of oil-fired appliances.
Indoor storage tanks are less likely to spill and do not emit an odour.
An indoor oil tank should be installed where it can be easily inspected but will not be damaged by normal household activities. If possible, the tank should be surrounded with a low curb and dike to contain any leaked oil.
The tank should never be placed tight against a wall as this can cause the tank to rust.
The fuel supply line should be covered and filtered to protect them from damage.
Storing objects on top of the tank could potentially lead to damage.

Outdoor Oil Tanks

Outdoor tanks should be placed at least 15 metres from any well.
To prevent rust, the tank's exterior should be covered with enamel paint.
The tank should also be supported properly with a non-flammable base of concrete or patio stones to prevent it from shifting or falling over. Wood is not recommended as it can burn, rot and retains water, which causes the tank to rust.
The tank should be sloped slightly toward the drain, and should never be in contact with a wall.
To allow for changes in ground level, the oil burner supply line should have a horizontal loop before entering the building. The line should be sloped toward the building to prevent water collection.
If possible, the oil filter should be placed inside the home because collected water can freeze and cause splitting. The supply line can be installed through the top of the tank to protect against breaking the line and draining the tank. If frost heaving or ground settling causes a tank to move, it should be levelled properly.

Underground Oil Tanks

There is concern many underground fuel oil tanks have reached the end of their useful lives and are beginning to corrode, rust and leak. Increasing homeowner insurance claims resulting from leaking fuel oil tanks are very expensive and can lead to high insurance rates, or even refusal of coverage.
It is a homeowner's legal responsibility to properly maintain the oil tank and clean up any spills or leaks that may occur.
An underground tank is tougher to inspect, but the biggest tip-off it may be leaking is if your home is using more fuel than normal. Just one litre of leaked oil from an underground tank can contaminate one million litres of drinking water.

Oil Tank Removal Guidelines and Residential Underground Storage Tank Removal — What you need to do know about oil tanks on your property for the City of Vancouver.

Source: CREA

Outstanding Agents, Outstanding Results.

Choose Jeff Shields, your RE/MAX REALTOR, for Qualicum real estate, Oceanside BC commercial properties, Qualicum Beach luxury homes, Parksville waterfront estates, Errington mobile homes, mid-island Vancouver Island listings, French Creek townhomes, Coombs real estate agent in British Columbia.

It's a good Life!

This file last modified Tuesday, 08-Apr-2008 14:25:11 CDT

Lifejackets | Free Balls | Calorad | Donate Car New Hampshire | Plumber in Farnborough

Jeffery Shields - REALTOR