Should Insurance Protect Homeowners From Financially Devastating Heating Oil Spills?

State records show there are an average of 118 heating oil spills per year across Massachusetts, but only about 5 percent of home insurance policies cover them

Jay Eberle sat in front of state lawmakers at the Massachusetts Statehouse and described the moment he discovered a heating oil spill in the basement of his Arlington home.

"This past summer, my family's emotional and financial well-being were thrown into turmoil when I returned home from work to the smell of oil fumes, oil-soaked wall-to-wall carpet, and a gushing leak from the bottom of my 275-gallon heating oil tank," Eberle testified.

Eberle shoved a cooking pot under the oil tank to capture the dripping liquid and called the fire department. Emergency responders arrived, along with representatives from the Massachusetts Department of Environmental Protection (DEP), to assess the damage.

Later that night, Eberle said he received a second gut punch.

"I put a call into my insurance agent and was shocked to learn my wife and I had no coverage for an oil leak," Eberle told lawmakers.

Eberle might count himself as one of the lucky ones. Fortunately, the spill was contained to the basement area. The 15- to 20-gallon leak had caused about $10,000 in damage to the finished basement and another $12,000 in environmental cleanup work.

As the NBC10 Boston Investigators illustrated, heating oil spill cleanup costs can quickly soar above six figures.

Katherine Hamelin, a Sutton widow, endured that nightmare scenario when she discovered a heating oil spill inside her home.

And Donna Baron, a Blackstone mother of three kids, discovered she was on the hook for the cleanup costs of an oil spill that happened years before she bought the home.

State records show there are an average of 118 heating oil spills per year across Massachusetts.

Search for a property in the DEP hazardous waste database.

There is a relatively inexpensive insurance rider available to homeowners that covers the damage and cleanup, but here is the problem: They have to know to ask about it.

Data reveals most policyholders remain in the dark. Only about 5 percent of homes with heating oil are protected.

It is the reason Sen. Anne Gobi, a Spencer Democrat, is proposing a bill that would make insurance coverage mandatory instead of what she describes as a well-kept secret.

"I think it's a good bill," she told fellow lawmakers on the Joint Committee on Financial Services during a recent legislative hearing. "Homeowners don't know it exists and I would imagine for most, they assume it's covered."

However, lobbyist John Murphy with the Massachusetts Insurance Federation called the bill "unnecessary."

He argued it was unfair to have all policyholders pay to cover damage from a heating source only used by a percentage of homeowners in the state. He suggested educating more people about the insurance rider that's already available.

"If you start adding this into everyone's policies, there's a cost shift there. The costs will go up for everybody," Murphy said.

Supporters of the bill pointed to last year's natural gas explosions in the Merrimack Valley, saying all policyholders paid to cover damage from that heating source.

Attorney Susan Crane said she has represented more than 100 homeowners who have experienced heating oil spills on their property. For the most complicated cleanups, that can involve moving a home off its foundation. Crane said some price tags have surpassed $1 million.

"We don't feel that oil heat should be singled out with no coverage in the event of a catastrophe," Crane said.

After a story about Hamelin's predicament aired on NBC10 Boston, her insurance company agreed to pick up the tab for the cleanup costs at her Sutton home.

And in Barron's case, the DEP stepped in to handle the required remediation, admitting it had failed to follow up on the condition of the property for years before Barron purchased it.

But elsewhere in the state, hundreds of homeowners get stuck with costly cleanups.

Sen. James Welch, who co-chairs the Joint Committee on Financial Services, expressed his support for the proposed legislation in a statement to NBC10 Boston.

"This is an important layer of consumer protection for those seeking to buy a home as well as current owners," Welch said.

Ryan Kath can be reached at ryan.kath@nbcuni.com. You can also follow him on Twitter or connect with him Facebook.

Contact Us