New Michigan Law Significantly Reduced Deductible for UST Insurance

Last week, Governor Snyder gave owners and operators (O/O) of petroleum underground storage tanks an early Christmas present by signing House Bill 5599, creating Public Act 380 of 2016 which amends Part 215, Underground Storage Tank (UST) Corrective Action Funding, of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended.

The amendments significantly reduce the deductibles for O/O who use the Michigan Underground Storage Tank Authority (MUSTA) as their insurance (O/O are required to have insurance for each UST in the event of a petroleum release to cover environmental response and remediation expenses). For O/O who own seven or fewer USTs, the deductible has been reduced from $15,000 to $2,000 per claim. For O/O who own eight or more USTs, the deductible has been reduced from $50,000 to $10,000 per claim. Also, the annual fee to buy-down the deductible amount, which only applied to O/O with seven or fewer tanks, has been eliminated.

The reductions in the deductibles will likely make the fund much more attractive to O/O, as the fund will now be less expensive than private UST insurance, which is currently being used for coverage of the majority of USTs. Furthermore, insurance claims on the MUSTA fund are also likely to be awarded without much argument if they were filed properly and the O/O were in compliance with applicable laws, regulations, and paperwork, as the fund has an explicit goal of assisting O/O in “providing financial assistance to remediate contamination caused by releases from petroleum underground storage tanks.”

If you are thinking of using the MUSTA fund as either your financial responsibility mechanism or as your UST insurance, and you want to be sure you have completed the necessary steps to be eligible to receive your claim reimbursement in the event of a UST release, contact Superior Environmental to learn what we can do to help you save money by using the fund.

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