Environmental Expert Tim McDonald: Homeowners Insurance

In the late 90s NJ declared all groundwater in the state to be the property of the state. Even the groundwater under your home. Therefore if your underground storage tank (UST) leaks and contaminates the groundwater, you have done third party damage. Until the mid-2000s homeowners insurance companies generally accepted liability. A change is the law in the mid-2000s allowed insurance companies to treat oil tank liability as a separate line item. Homeowners were offered third party damage coverage from a UST as a separate charge. Most homeowners did not understand the nature of this type of third party damage and did not accept the coverage (or the additional charge). They now are not covered for groundwater contamination resulting from a leaking UST, the biggest part of remediation from a UST leak.
The good news is that there are insurance companies in NJ that still offer this coverage and it is available to most homeowners, you just need to know where to look for it.