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Fuel Burning Appliances and Insurability

Blog Issue #: 

7

Fire and Environmental Hazards

Fire Risks

According to the Council of Canadian Fire Marshals and Fire Commissioners (CCFM/FC) report, Fire Losses in Canada Year 2007 and Selected Years, 5% of home fires in Canada originated in in masonry or factory built chimneys. This does not appear to include statistics for fires originating at the open hearth; wood burning appliance; gas or oil burning equipment; or related activities such as disposal of ash. In provinces where statistics are available, and wood burning is more common, the numbers are very much higher. In Nova Scotia, chimney flue pipes accounted for 28% of fire origins, and it was higher again, at 31%, in New Brunswick. It is important to recognize that while national averages may indicate cooking, heating equipment, arson, electrical, and smoking round out the top five national fire causes.

Regional differences in occupant use and behaviour affect chimney fire statistics.

The Silent Killer

Combustion, from both controlled and uncontrolled fires, creates other hazards: the most serious of which is carbon monoxide. This gas, known as the silent killer, is colourless and odourless, and often goes undetected until it is too late. This is because the carbon monoxide molecules block the blood capacity to carry oxygen which leads to suffocation—without the obvious struggle to breathe. While a house fire is an obvious risk, it is important to note that normally functioning fuel burning equipment may backdraft, leaking carbon monoxide into a dwelling, and this would likely occur without notice. This reverse flow is may be caused by negative pressure created by dryers, high efficiency stove exhaust hoods, and as a result of problems such as a blocked HRV intake vent.
According to the Canadian Centre for Occupational Health & Safety, symptoms from exposure may include:
  • headache;
  • nausea;
  • dizziness;
  • drowsiness; and
  • confusion.

"[It may also] cause permanent damage to organs including the brain and heart".

Carbon monoxide is a serious hazard, reportedly causing more deaths than the fires themselves, and it is created by innocuous sources as well as by fires (i.e. backdrafting). If you have any fuel burning equipment in your home, including vehicles and machines in an attached garage, please read this carbon monoxide fact sheet. Remember: inspecting a chimney, fireplace, or stove alone, is not sufficient to protect you from carbon monoxide. Is is also necessary to review systems that may affect the safe operation of those devices, especially ventilation and detection equipment, and therefore a complete home inspection is recommended.

All houses should be protected with carbon monoxide and smoke detectors.

Oil Spills

As oil tanks age, the associated leaks have increasingly caused significant environmental damage and financial loss. In 2001, a record number of domestic home heating oil leaks prompted the Government of Newfoundland and Labrador to develop the Heating Oil Storage Tank System (HOST) Regulations. Similar leaks have occurred across Canada:

  1. Home oil tank leaks a growing problem, CBC News, Ottawa
  2. Buried oil tank costs North Vancouver homeowner $85,000, CBC News, Vancouver
  3. Iqaluit woman to pay $55K for home heating fuel spill, CBC News, Iqaluit

It is often cited that 1 litre of home heating oil can contaminate 1 million litres of water. It is no wonder that petroleum leaks may result in expensive cleanup costs. In fact, these costs average between, according to the Insurance Bureau of Canada. They also report that residential oil tank leaks have increased more than 50% in a decade, with claims of nearly $12 million between 1996 and 1998. Owners should be aware that they are responsible for these clean up costs and that insurance policies may not cover those expenses. In some cases, they may even be responsible for oil spills originating on adjacent property. In Ontario in 2013, the decision of Justices Rosenberg, Goudge and Tulloch, in Kawartha Lakes (City) v. Ontario (Environment) confirmed that property owners are indeed responsible for clean up, as well as responsible for measures to prevent future contamination. It does not matter if the property owners are innocent of causing the leak itself.

Property owners should check insurance coverage for cleanup costs.

Laws will differ in every province. Homeowners should discuss their responsibilities with legal council.

A Quick Review

The Insurability Series

Continuing with this series on insurance and insurability, and how they relate to home inspections, we first reviewed electrical systems: wiring methods, common issues, electrical fire hazards. If you just catching up, go back and start with Insurance and Insurability for an introduction to important insurance topics.

Remember!

Insurability is determined by insurance companies, not by home inspectors.

Insurance companies decide which risks they will cover and at what rate. Underwriter and risk assignments are proprietary information and their decision making process may change without notice. The Insurance Bureau of Canada (IBC) does not establish or make public risk criteria. Since home inspectors are not provided this information, and it is constantly changing, it is not possible for home inspectors to report on insurability. Home inspectors do recognize patent defects, explain their significance, and make recommendations for improvements.

Common Fuel Burning Equipment Insurance Issues

Caution: This is not an exhaustive list. Please see Insurance and Insurability.

The Insurance Company Requested an Chimney Inspection

Wood Energy Technology Transfer (WETT)

Insurance companies may request an inspection. Sometimes this is referred to as a WETT Certification or a WETT Approval, however no such validation exists. There are, however qualified individuals, including Wood Energy Technology Transfer Inc (WETT) certified professionals, who may inspect a chimney and issue a report. According to WETT, a level 1 report of readily accessible components should include the appliance type, certification markings, clearances, and if the installation meets relevant codes.

Canadian Standards Association (CSA)

There are, however, other standards. The Canadian Standards Association standard A770-16, Home Inspections, which under subsection 5.6.3, Fireplaces and Chimneys, requires inspections to include, but not be limited to, an examination for damage; improper function; and safety issues. Furthermore, under subsection 5.6.1, Heating and Cooling Systems, inspections shall include, but not be limited to, an examination for improper function; and safety issues. This would include other fuel burning equipment like propane stoves, oil burning furnaces, as well as attached components. Most importantly, since standard home inspections report on the entire house, they also include an examination of systems that may affect the performance of wood, oil, and gas burning equipment such as HVAC, HRV, and fixture venting.

National Building Code of Canada (NBCC)

Finally, the National Building Code of Canada; sections 9.21, Masonry and Concrete Chimneys and Flues, and 9.22, Fireplaces; establishes the code requirements for these types of installations for structures conforming to Part 9 — Housing and Small Buildings. Individuals educated or trained, and experienced in interpreting these codes, and deem themselves competent to undertake the specified assignment, may perform a code review. This includes municipal architects, building inspectors, engineers, technologists, and other professionals trained in building code analysis.

Blocked HRV intake duct.
Defective chimney crown, cap, and flashing.

The approach of RJ Miller Building Professionals standard home inspection report is meet all requirements of CSA A770 for home inspections, perform a code assessment, and report the appliance type and certification markings; thus providing clients with the most comprehensive and useful information.

The Insurance Company Requested Information on Oil Tanks

Documentation & Inspection

Insurance companies are increasingly looking at preemptive measures to minimize the risk of claims, like when providing policies for dwellings that use oil heating. As Harry Steimetz recommends in, Residential Oil Tanks: A Small Leak That Can Lead to a Big Pay Day (also covered by the Canadian Underwriter, Small Leak Big Payday), brokers and underwriters should ascertain the age of the tank, including the age of any supporting cradles; a visual inspection of the tank be performed; and the surroundings be evaluated for hazards and environmental conditions. In Ontario, and possibly other jurisdictions, legislation requires the owner to keep a record of inspections, and this may be requested by the insurance companies. There have been cases where homes with exterior tanks older than 15 years, and interior tanks older than 25 years, where not insured.

Unsecured oil tank footing.
Incorrect oil tank location.

Buried Tanks

Underground tanks pose special concerns. Since they are buried, they may go unnoticed by inspectors, they cannot be inspected without using specialized equipment, and they are outside the scope of a standard home inspection. Owners and buyers should discuss the risks and responsibilities with their lawyer and real estate professional.

Home Inspections Are Necessary

As discussed previously in the first blog in this series, Insurance and Insurability, insurance underwriter and broker risk assignments are trade secrets, policies may change without notice, and home inspectors are not advised of these changes. Home inspectors are, however, experts with respect to identifying system components and reporting deficient conditions. As such, an inspector can identify the installed systems and insurance companies may require an inspection be performed for this purpose. More importantly, inspectors can recognize patent defects, explain their significance, and make recommendations for improvements.

What Options Are Available for Fuel Burning Equipment Insurability Issues

Unlike some issues with electrical wiring which may still be acceptable, defective conditions and aging equipment used for fuel burning appliances and components is much more likely to be a real concern. All steel oil tanks will eventually corrode, for example. Regardless of an insurance company's request for inspection and documentation of this equipment, owners and buyers are strongly encouraged to take all measures to correct deficiencies, properly maintain these systems, and replace aging components.

The adage, a stitch of time saves nine, applies.

Have You Experienced These Issues?

Do you have an oil tank on your property? Have you ever been denied insurance due to aging or unsatisfactory components? Did your insurance company require a "WETT Certified" inspection? Have you considered making improvements to your fuel burning systems for your own safety and peace of mind? Your comments and questions are welcome. Please add them below. Thank you!

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