Older oil tanks can be major liability for homeowners

If you're heating your home with oil, you'd better pay attention to what shape your tank is in.

That's because a leaking tank can be a major liability, with potentially massive clean up costs — and insurance companies won't necessarily cover them. 

The Insurance Bureau of Canada (IBC) says homeowners can be 100 per cent responsible for clean up costs, which could be in the hundreds of thousands of dollars.

Current standards require homeowners to have a double-walled tank with a inner liner of plastic and a solid concrete pad. The tank has to be bolted down in case of an earthquake.

And real estate agents often encourage homeowners to replace their tanks as part of selling a home.

"A lot of people don't realize the biggest [surprise] right now, if you're selling a property, chances are that real estate will want you to replace the tank as part of the deal," says Peter Kennedy, a burner mechanic for Griffiths Heating & Sheet Metal in Whitehorse.

He says some people get "sticker shock" when they realize that selling their house means replacing the oil tank.

"Most replacement tanks in the Yukon can cost upwards of $5,000 to replace. Insurance companies are making all the rules," says Kennedy.

He says the price of a new oil tank has been steadily going up in recent years. And sometimes there are also additional costs associated with replacing an aging tank.

"I even found out this morning from a customer that insurance companies would like to have soil samples taken before the pad is poured — and that could run you $1,000, plus a new tank," Kennedy said.

"It's extremely important that people maintain and inspect their tanks on a regular basis to be preventing any type of loss or damage," says Rob de Pruis of the Insurance Bureau of Canada.

"So it's in your best interest to make sure that you're properly inspecting and maintaining your fuel oil tank."

He says insurance policies don't typically cover the cost of a fuel oil spill on one's property. 

Collin Remillard, manager of environmental compliance and inspections for the Yukon government, has seen his fair share of fuel tank oil spills in the Yukon.

"Some insurance companies will sell oil damage insurance to your property, but you must have a certified oil tank for that to happen," Remillard said. 

"We've heard people's experiences where they've actually had to re-mortgage their homes to clean up these spills, that's how serious this is."

Remillard says there were more than 100 different spills last year in Whitehorse, and about 13 per cent of them were from aging and defective home heating oil tanks.

"We have heard of examples where a fuel tank had been leaking for many years. It was discovered that it was a leak, and when the owner hired a consultant to remediate the property, we have examples where people had to lift their whole house up, dig, remove the foundation."

According to Kennedy, many Griffiths customers are opting for different home heating methods once they find out what a new tank will cost. A new electric or propane furnace might cost only a few thousand dollars more. 

"Out of every 20 estimates I do, probably half of them are going propane or electric," said Kennedy.  

Protecting the city's aquifer

Beyond individual properties, leaking oil tanks can have a major impact on the environment.

The City of Whitehorse says oil spilled from aging tanks could eventually migrate into the city's water, and that's a concern especially in the Riverdale neighbourhood.

"There is a lot of old houses there," Kennedy said.  

"Most of our drinking water comes from Riverdale. You don't want oil seeping into the ground."

According to the IBC, only one litre of oil can contaminate a million litres of fresh water. Most home heating oil tanks hold 1,000 litres.

Collin Remillard of the Yukon government, who's on the front line dealing with oil spills, says homeowners need to pay serious attention to their home fuel tanks.

"These tanks don't last forever ... they have a life span and you have to look after them," he said.