Oilheat Customers' Home Insurance Options are Being Reduced. Ontario Chapter is Working on Solutions.
Over the past few months a number of COHA Ontario members have told us their residential heating oil customers have faced home insurance rate increases of 10 to 25%, or their insurance companies have decided not to renew policies for homes heated by oil. The insurers’ business position is that claims costs are rising.
COHA Ontario Chapter believes the reason claims costs are on the rise is twofold:
- Tank failures (i.e. less than 10 years old) due to internal corrosion/pinhole leaks. The causes of this are still unverified but currently are being researched by the Engineering Department of the University of Toronto as part of a comprehensive study by the Ontario Chapter of Canadian Oil Heat Association. We believe it is critical for COHA members to take immediate action to prevent or mitigate future spills through carefully implementing best practices which effectively manage risk. This will help members and their customers as well.
- Out of control cost overruns by remediation companies that go way beyond acceptable spill cleanup protocols. Some unethical operators use scare tactics to drag out the remediation process resulting in large sums unnecessarily paid out by homeowner insurance companies.
Clearly, homeowner insurance premium increases add a financial burden to residential heating oil customers. Tank failures and claims costs also threaten the survival of the oilheat industry; an industry which satisfies the home comfort needs of 276,000 families in the province and directly employs 7,500 Ontarians.
COHA Ontario Chapter believes working collaboratively with the insurance companies will help find solutions which will benefit all concerned stakeholders. We have met with representatives of several home insurers and have begun a joint insurance industry + oilheat initiative to help ensure heating oil customers have reliable, affordable protection for their homes and continue to enjoy their heating source of choice.
We will keep COHA Ontario members informed of further developments.