Oil Tank Insurance & Liability: Long Island Homeowner Guide 2025

Why Oil Tank Insurance Matters on Long Island

If you own a home in Nassau or Suffolk County, there’s a good chance it either has—or once had—an underground or aboveground oil tank. While oil heat is common across Long Island, tanks come with a hidden risk: leaks.

Even a small leak can contaminate soil, groundwater, and nearby properties. Cleanup can cost tens of thousands of dollars, and in most cases, standard homeowners insurance does not cover oil tank leaks. That’s why understanding insurance and liability rules is critical for homeowners in 2025.

Does Homeowners Insurance Cover Oil Tank Leaks?

In most cases, the answer is no. Standard homeowners insurance policies exclude coverage for gradual oil tank leaks or soil contamination. Some policies may cover sudden and accidental releases, but the fine print varies.

If your tank leaks slowly underground—something that often goes undetected until a home sale or inspection—your insurer will likely deny the claim.

What this means: You could be on the hook for both cleanup costs and any third-party claims if neighboring properties are impacted.

Oil Tank Liability on Long Island

Under New York State Department of Environmental Conservation (DEC) regulations, homeowners are considered responsible parties if their tank leaks. This means:

• You must report suspected leaks or spills.

• You may be required to test soil and groundwater.

• You’re financially responsible for remediation, unless insurance or a state cleanup fund applies.

If contamination spreads, liability can extend beyond your property line. In some cases, homeowners have faced lawsuits from neighbors, adding even more cost.

Insurance Riders & Specialized Coverage

Some insurers offer oil tank riders or pollution liability endorsements for an additional premium. These coverages may help with:

• Oil leak detection and cleanup

• Property damage repairs

• Third-party liability claims

However, coverage limits vary—often capped at $50,000 to $100,000—while severe contamination can exceed those amounts. It’s important to review policy options carefully and weigh them against the potential risk.

How to Protect Your Home & Wallet

Even if your insurance is limited, you can take proactive steps to minimize risk and potential liability:

1. Inspect regularly – Schedule annual inspections for aboveground tanks; underground tanks should be checked by professionals using soil or leak detection methods.

2. Replace aging tanks – Most tanks last 15–20 years. If yours is older, replacement is often cheaper than the liability of a leak.

3. Consider abandonment or removal – Proper tank closure by a licensed contractor provides documentation that protects you during property sales.

4. Keep records – Maintain inspection, removal, and abandonment paperwork. Buyers and insurers will require proof of compliance.

5. Work with specialists – Partner with environmental contractors like Eastern Environmental who understand DEC regulations, permitting, and remediation.

FAQs

Does homeowners insurance cover oil tank leaks in New York? Most standard policies exclude gradual leaks, but sudden accidental spills may be partially covered. Check your policy carefully.

What are my responsibilities if my underground tank leaks? You must report the leak to the DEC, test for contamination, and take responsibility for cleanup.

Can I buy special coverage for oil tanks? Yes—some insurers offer riders or endorsements, but coverage limits may not fully cover severe contamination.

What documents should I keep? Inspection reports, abandonment certificates, soil test results, and any DEC filings. These are essential during home sales or insurance claims.

Why Choose Eastern Environmental Solutions

At Eastern Environmental, we’ve helped Long Island homeowners for over 20 years with oil tank removals, abandonments, inspections, and spill response. We don’t just remove tanks—we handle the paperwork, testing, and compliance that protect you with buyers, insurers, and regulators.

If you’re concerned about oil tank liability, don’t wait until it’s too late.