Do You Need Insurance For Propane Tanks? (Cost 2024)

Do You Need Insurance For Propane Tanks
Insurance coverage for propane tanks

Propane tanks are a big concern for anyone who owns a farm. For some people, even the thought of one’s livelihood being put in jeopardy is too much to bear, so they make sure that they have the resources necessary to restore it if anything happens.

You need insurance for propane tanks. Here is what you need to know:

The first step is to understand what your policy covers. You need to be aware of the different types of insurance and how they can help you in the event of an accident or other problem. There are two main types of it for propane tanks: liability and physical damage. Liability insurance will cover you if someone is injured while on your property or if you are held responsible for damages caused by your tank.

This is the most important type of insurance for propane tanks because it will protect you from having to pay out of pocket for any medical bills or other expenses that may be incurred as a result of an accident. Physical damage insurance will cover the cost of repairs to your tank if it is damaged in an accident.

This is important because it can help you avoid having to replace your entire tank if it is totaled in an accident. There are other types that you may want to consider as well, such as business interruption insurance.

This type of policy will help you recoup some of your lost income if your business is forced to close due to damage from an accident. When it comes to deciding whether or not you need insurance for propane tanks, there is no right or wrong

Read related article: Will the Propane Company Refill Your Tank If It is Expired?

What is Insurance for Propane Tanks?

Insurance is a type of coverage that can be important if you have a tank at your home, business, or farm. When leasing a tank from a supplier, they often require you to carry insurance. This helps cover any damages or accidents related to the tank, protecting both you and the supplier financially.

If you own the propane tank, local regulations may dictate whether you need this protection. Even in the absence of such regulations, ensuring it is a wise decision. Tanks can be costly to replace or repair if damaged or destroyed. Having this means you won’t have to bear the full cost of replacement or repair if something goes wrong.

When looking for insurance, it’s beneficial to shop around. Comparing quotes from multiple insurers allows you to evaluate different levels of coverage and prices. This way, you can choose a policy that offers the best protection at a reasonable cost. In essence, this coverage is about safeguarding your investment and ensuring peace of mind in case of unexpected incidents.

Insurance is something you might need to think about, especially if you have a tank at your home, business, or on a farm. Here’s a simple breakdown:

  1. Leased:
    • If you’re leasing the tank from a supplier, they might ask you to have insurance for it.
    • This means if something goes wrong with the tank, it can help cover the costs.
  2. Owned:
    • If the tank is yours (you bought it), you should check with your local authorities.
    • Sometimes, there are rules about needing insurance for propane tanks.
    • Even if there’s no rule, it’s a smart idea to have it.
    • Tanks can be expensive to fix or replace if they get damaged or destroyed.
  3. Getting Insurance:
    • When you look for insurance, it’s important to talk to different companies.
    • Get different price quotes and compare what they cover. This helps you find the best deal.

In short, whether you need insurance depends on if you own it or lease it, and what the local rules are. But, it’s usually a good idea to have protection to safeguard yourself from the cost of any damage to the tank.

How Much Is It?

If you’re wondering how much it costs to insure a tank, the answer depends on a few factors. The type of propane tank, its location, and the amount of coverage you need all play a role in determining your premium. Here are a few things to keep in mind when shopping for insurance:

  • The type of propane tank (aboveground or underground) will affect your premium. Abovegrounds are typically less expensive to insure than underground.
  • Your location also plays a role in how much your premium will be. If you live in an area with a high risk of flooding or other natural disasters, your premium will be higher than if you live in a low-risk area.
  • The amount of coverage you need will also affect your premium. If you only need basic coverage, your premium will be lower than if you need comprehensive coverage.

The cost can vary widely based on several factors. It’s not possible to provide an exact figure without specific details, but here are the key elements that typically influence the cost:

  1. Size and Capacity: Larger sizes or those with higher capacity might cost more to insure due to the increased potential risk or replacement cost.
  2. Location: Its rates can vary depending on where you live. Areas prone to natural disasters or with higher rates of property crime might see higher costs.
  3. Type of Use: Residential, commercial, or agricultural use can affect the cost. Commercial or agricultural tanks may be more expensive to insure due to the higher levels of usage and associated risks.
  4. Coverage Level: The extent of coverage you choose will impact the cost. Comprehensive coverage that includes a wide range of potential issues will be more expensive than basic coverage.
  5. Provider: Different companies offer different rates, so the cost can vary depending on who you get your insurance from.
  6. Deductibles: Higher deductibles typically lead to lower annual premiums, but it means you’ll pay more out of pocket if you file a claim.

To get an accurate estimate of the cost of insuring your propane tank, it’s best to contact providers directly and get quotes based on your specific circumstances. This will allow you to compare and find the best rate and coverage for your needs.

Why Do You Need It?

If you have a propane tank on your property, you are required by law to have insurance for it. This is because the gas is a highly combustible material and can cause serious damage if there is a leak or other accident. Even if you are not using the propane for anything, it is still considered a hazardous material and must be insured.

Insurance is important for several reasons, especially considering the potential risks associated with storing and using propane:

  1. Protection Against Damages: Tanks, whether at home or in a business setting, can suffer damage due to various reasons like accidents, natural disasters, or vandalism. It can help cover the cost of repairing or replacing the tank.
  2. Liability Coverage: If your tank causes injury to someone or damages their property, liability coverage in your insurance can protect you from expensive legal costs and compensation payouts.
  3. Compliance with Lease Agreements: If you’re leasing, the lease agreement might require you to have insurance. This protects both you and the leasing company from financial losses due to damages or accidents involving the tank.
  4. Financial Security: Replacing or repairing a tank can be costly. It ensures that you’re not solely responsible for these expenses, providing financial security.
  5. Peace of Mind: Knowing that you’re covered in case of any unforeseen incidents involving your tank can give you peace of mind, especially since propane is a flammable and potentially hazardous material.

Having it protection mitigates financial risks, covers liabilities, and ensures compliance with leasing terms, all while providing peace of mind.

Who Needs Insurance

If you own the tank, you may be wondering if you need this protection. After all, propane is a flammable gas, and tanks can be expensive to replace. The short answer is that it depends on your situation.

If your tank is leased from a company, they may require you to have insurance. If you own your tank, insurance is not required but may be a good idea.

There are two types: physical damage coverage and liability coverage. Physical damage coverage protects your tank from things like fire, vandalism, and theft. Liability coverage protects you from damages or injuries that occur if your tank leaks or explodes.

So, do you need insurance? It depends on your circumstances. If you’re unsure, it’s best to consult with an agent or broker who can help you assess your risks and decide if coverage is right for you.

How Much Insurance Coverage Required?

There is no one-size-fits-all answer to this question, as the amount of coverage required for a tank will vary depending on a number of factors, including its current value, its location in the property, and the specific use for which the tank is being purchased. However, as a general rule of thumb, it is typically recommended that individuals purchase insurance policies that cover at least the value of their tanks.

$60,000 for “first party coverage is the usual coverage for minor incidents. $250,000 is required for “third party coverage” which covers damage of the property.

The amount of insurance coverage required for a specific item or situation, like a propane tank, can vary based on several factors:

  1. Value of the Asset: The coverage should be enough to replace or repair the propane tank in case of damage or loss. This is often determined by the size, type, and installation costs.
  2. Risk Factors: Consider the potential risks associated with the location and usage of the tank. Areas prone to natural disasters, or tanks used in high-risk industries, might require more coverage.
  3. Legal or Contractual Requirements: If you’re leasing, the leasing company may have specific insurance requirements. Additionally, local laws or regulations might mandate a minimum amount of coverage.
  4. Liability Concerns: The coverage should also account for potential liability costs. This includes medical expenses, legal fees, and damages if the tank causes injury or property damage.
  5. Personal Financial Situation: Your ability to absorb risk financially can influence how much coverage you need. If you prefer lower out-of-pocket costs in the event of an incident, you might opt for higher coverage.

It’s advisable to consult with an insurance professional to determine the appropriate amount of coverage for your specific situation. They can assess your needs and recommend a policy that provides adequate protection.

The Coverage Differs Depending on Whether You Have an Underground or Above Ground Tank

If you have an underground tank, your coverage may be different than if you have an above-ground tank. Here’s what you need to know about the difference in coverage.

An underground is more likely to be damaged by severe weather or flooding than an above-ground. As a result, your coverage for an underground propane tank may be different than for an above-ground propane tank.

If you have an underground, you’ll need to purchase comprehensive coverage to protect your investment. Comprehensive coverage protects it from damage caused by events such as severe weather, flooding, and earthquakes.

If you have an above-ground, you may not need comprehensive coverage. Check with your insurance company to see what coverage is available for your specific situation.

Check Your State for the Insurance Requirement

The requirement for insurance on a propane tank largely depends on whether you own or lease the tank, as well as your local state regulations. If you’re leasing from a supplier, they may require you to carry insurance for it. This helps cover any damages or accidents related to the tank.

For owned propane tanks, you should check with your local authorities for any specific regulations. Even if there are no explicit regulations, insuring it is generally recommended to protect against potential damages, which can be costly.

The cost of insuring depends on several factors, including the type (aboveground or underground), your location, and the level of coverage you need. Aboveground tanks are typically less expensive to insure than underground. If you live in a high-risk area for natural disasters, your premium may be higher.

Additionally, the amount of coverage you opt for will influence your premium; basic coverage will generally be less expensive than comprehensive coverage. The size and capacity, its use (residential, commercial, agricultural), and the provider you choose also affect the cost. Higher deductibles usually lead to lower annual premiums but mean more out-of-pocket expenses if you need to make a claim.

Regarding requirements, it’s important to note that most states require insurance for propane tanks due to the combustible nature of the gas. The specific amount of coverage needed can vary, and it’s advised to consult with a professional to determine the appropriate level of coverage for your situation. They can provide guidance based on the value, potential risks, and legal or contractual requirements.

Insurance May be Required When You Get a Permit

When you apply for a permit to install or operate a propane tank, it’s possible that your local regulations may require you to have insurance. This requirement is often part of the broader safety and regulatory framework governing the installation and use of propane tanks. Here’s why it might be needed when obtaining a permit:

  1. Risk Management: Tanks, due to their nature of storing combustible fuel, present certain risks. It serves as a financial safeguard against potential accidents or incidents involving the tank.
  2. Regulatory Compliance: Local or state regulations may explicitly require insurance as part of the compliance criteria for operating a tank. This requirement ensures that the owner is prepared to handle any financial liabilities arising from its operation.
  3. Liability Protection: It can provide liability coverage, which is crucial if the tank causes damage to property or injury to individuals. This coverage is particularly important for tanks located in residential or commercial areas where the potential for damage or injury is higher.
  4. Permit Approval Process: During the permit application process, proving that you have adequate coverage for your tank could be a key factor in obtaining approval. This shows the authorities that you’re committed to responsible and safe operation.

It’s important to check with your local regulatory authorities or a professional to understand the specific requirements for your area. They can provide the most accurate and up-to-date information about insurance requirements related to permits.


Whether you need insurance for a propane tank depends on several factors including ownership, local regulations, and potential risks. If you are leasing the tank, your supplier may require insurance to cover any damages or incidents.

For owned tanks, while it may not be legally mandated everywhere, it is advisable to have insurance as a proactive measure against the costs associated with damage or liability issues.

Additionally, local regulations might impose specific requirements, especially when applying for installation permits. It not only offers financial protection but also peace of mind, ensuring that you are prepared for any unforeseen incidents involving your propane tank.

Given the varying requirements and the complexity of policies, consulting with local authorities or aprofessional is recommended for guidance tailored to your specific situation

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