Underground Oil Tanks
Over the last few months, I have heard that more and more insurance companies are refusing to issue homeowner's insurance polices for properties that have an underground oil tank.
Several insurance agents have mentioned to me that the day may come when it is impossible to get such coverage.
The tanks, usually made of steel, are prone to rusting. Rusting leads to leakage which can lead to pollution of groundwater and wells. A huge concern for all of us.
Due to the potential problems with the tanks, many home buyers are putting a contingency in their purchase and sales contract requiring the seller to have any underground oil tanks removed before closing (this happened during a sale of mine last June in Weathersfield, Vermont). It was not insurmountable, but did take some extra effort to coordinate.
Any tank that is out of service for more than one year must be permanently closed.
The cost to remove a tank can cost anywhere from $1,000 to $2,500 depending on the location.
The State of Vermont does have a program which provides a grant of $1000 to qualifying homeowners to have these tanks removed. The program has a $100,000.00 limit per year beginning on July 1st. I am told the funds run out quickly.
The State of Vermont maintains a list of contractors who will remove the tanks.
For more information about the grant program or to get a list of contractors, you can contact the Vermont Department of Environmental Conservation at (802) 828-3888.
