August 31, 2012 by Canadian Underwriter
An Insurance Bureau of Canada (IBC) study on oil tank spills in Atlantic Canada shows the events prompted $78.58 million in claims for participating insurance companies from 2008 through 2011.
In all, there were 663 domestic oil spill insurance claims made over the four-year period. In Atlantic Canada, 42% of homes have an oil tank.
More than half of spills were caused by oil tank corrosion, notes a statement from IBC. Many of the claims involved newer tanks, including 133 claims relating to tanks between 0 and five years old, and 293 tanks between six and 10 years old.
While all tank materials had reported failures, the largest number of claims involved metallic tanks as opposed to fibreglass or other materials. Outside tanks were also responsible for 500 of the total claims.
A majority of reported spills were specific to the tanks themselves, but other sources of oil escape included the filter system, fittings, the heating unit or burner and the line.
The IBC study involved 21 participating insurance companies, representing roughly 86% to 89% of the insurance market in Atlantic Canada during the four-year timeframe. The data does not include spills on uninsured property or spills on property insured by non-participating companies.
The IBC recommends that homeowners ask questions about their insurance if they have oil tanks, and has published tips on its website for homeowners who have, or plan to have, oil tanks on their property.