The Problem With Aging USTs
Underground storage tanks (USTs) are not meant to last forever. Owners and operators of older USTs face a difficult dilemma: Should they spend the capital to replace an older UST, or continue to conduct testing and maintenance and hope that insurance coverage will insulate them against potential spill liabilities? Below, we discuss the problem of aging USTs in the United States and the financial risks posed to tank operators. Call a certified underground storage tank remediation and removal professional at Herbert Lutz & Co. if you need assistance with a damaged or contaminated UST in New Jersey or Florida.
Aging USTs Around the Country
Like any other product, USTs have a shelf life. A number of recent studies have analyzed the effectiveness of USTs as they age as well as the presence of older tanks nationwide. Most tanks are built with an expected “life” of 30 years. The Association of State and Territorial Solid Waste Management Officials (ASTSWMO) and the EPA found that the average UST lifespan historically has actually been closer to 20 years, based on the age of tanks at the time of removal. By the time tanks have hit the 20-year mark, they have already suffered significant wear and tear. Tanks manufactured before the mid-to-late-1980s were made from bare steel, which is significantly more prone to corrosion over time, increasing the chances of a leak.
Despite the decreased efficacy of older tanks, research from ASTSWMO and others found that close to two-thirds of USTs in many states are over 20 years old. Around 40 percent of USTs operating nationwide are older than 30 years old. Owners of older USTs face potentially massive liability should a leak cause significant damage to the surrounding environment, especially if individuals and other business entities are directly impacted by a spill.
Rising Insurance Costs
Insurance coverage for USTs can provide UST operators a measure of financial insulation against the risks of spills and other forms of liability. However, UST operators with older tanks face significantly higher premiums. Manufacturer warranties tend to cover tanks for 30 years, the time frame the manufacturers can comfortably assert the tanks will remain sturdy and dependable. No matter how well-maintained the individual UST may be, aging increases the risk of an event.
Insurance companies are well aware of the increased risk that aging tanks bring. While operators of new and younger tanks can expect competitive premiums and low deductibles, insurance policies for older tanks are so expensive as to seem punitive. Deductibles for claims skyrocket to more than $50,000 per claim, and in some cases, insurance providers demand upwards of a $1 million deductible for a single claim. Many insurance companies now have a policy to simply refuse to insure tanks that are already over 20 years old.
Replacing an aging tank, despite the initial cost, may be more financially sound than maintaining an exorbitantly priced insurance policy and dealing with the potential liabilities raised by a spill. Mitigating these costs with proper, thorough cleanup in the event of a spill is absolutely essential for UST operators to continue without incurring financial ruin. Operators of older tanks certainly must conduct more frequent testing, service, and maintenance to reduce the risk of a leak and identify any leaks as soon as possible.
Call the Dedicated and Thorough UST Remediation Pros at Lutz for Help With Underground Storage Tank Issues
If you discover a UST at your construction worksite or if you have to respond to a UST spill on your property, you need effective help from seasoned advisors with years of underground storage tank experience. For professional, comprehensive assistance dealing with a UST on your property, call Herbert Lutz & Company in Florida at 954-971-5222, or in New Jersey at 908-862-8888.