The key things you need to know are:
- Cover for house policies is up to $30,000 subject to a minimum excess of $2,500 (unless a higher excess applies)
- The insured and family members are not covered under the new changes for meth contamination
- If you are a landlord, the landlord obligations under your policy must be fully met for a claim to be accepted. Meeting these obligations and managing a rental property well are the best way to protect yourself and your property from contamination risk.
We have created a general overview of the process for domestic property around meth contamination. This will help you understand the process if you think your property might be contaminated. Read more here.
Meth Contamination FAQ
Check out the FAQs and ebook below to learn more about damage from methamphetamine contamination.
What is Meth?
Methamphetamine (also known as Crystal, Ice, Meth or ‘P’) is an addictive, illegal Class A drug. Methamphetamine is taken orally, smoked, snorted, or dissolved in water or alcohol and injected. Smoking or injecting the drug delivers it very quickly to the brain, where it produces an immediate, intense euphoria. Contamination from meth is from residue or by products that are left behind on surfaces when it is consumed, manufactured, stored or distributed. These contaminants can easily be absorbed into building materials, fixtures, fittings and household items. Anybody that comes into contact with meth contamination can ingest the meth through their skin, or by touching contaminated surfaces then transferring the chemicals to their mouth, nose or eyes. The presence of meth at low levels does not necessarily pose an identified health risk. Our policies are designed to respond to covering the cost of decontaminating or replacing items only where a clear health risk is identified. We are guided by the most recent health information. Refer to our meth booklet here for more information on insurance cover for meth
Policy Cover for Home Policies
What is included in the cover?
Cover will be triggered when there is ‘presence’ of meth in the home that exceeds the currently recognised standards. This includes owner occupied, rental properties and holiday homes. All cover for meth, both manufacture and consumption will be dealt with under one Methamphetamine Cover Extension. It includes contamination that happened in a previous period of cover provided you were insured with IAG, including if you have changed cover within any IAG brand or product.
What does the meth extension cover?
The extension has a standard $30,000 sub-limit and is subject to a $2,500 excess (refer to the relevant policy wording for details). Any cover for ‘loss of rents’ or ‘alternative accommodation’ will be paid in addition to this sub-limit if a claim for meth contamination is accepted under the policy.
Will there be any change to premiums?
Policies now include cover for contamination caused by consumption; as a result our premiums may change to reflect this additional cover.
What is not included in the cover?
Meth contamination that involves you, your spouse, a family member or employee is not covered. While we recognise the personal risk we believe this should to be managed within the family. This includes homes owned by a trust or a company, where the policy holder is a trustee, director or shareholder. There will also not be any cover for contents damaged as a result of meth contamination. To the extent they are insured, Landlord’s contents or fixtures and fittings will be covered under the house sublimit.
Can I choose my level of cover?
You are not able to opt out of the meth extension; we want coverage to be as broad as possible.
Why do I have to have this cover?
The majority of claims we see are related to consumption, if customers only have lab cover they are at higher risk of loss. It might also be difficult for you to prove that a loss was from a meth lab, not from consumption, which adds further risk and complexity for you at claim time.
Is there any limited cover?
There are limitations on the extent of cover for contamination with tenancies or occupancy of less than 90 days. There’s also no cover for meth contamination resulting from meth consumption, for homes with short period (less than 90 days) tenancies or occupancies, such as those available on property sharing websites, or renting out your holiday home. Contamination from manufacturing, storage and distribution will still be covered. Short term tenancies represent a significantly higher risk of loss caused by meth consumption due to the increased number of people accessing the property and the inability of owners to properly vet those using the property.
What about previous contamination of a house?
IAG are only offering cover provided the contamination first occurs and is discovered while the customer has their home insured through IAG. In some cases, there may be a small level of contamination that remained after a previous contamination event insured elsewhere has been cleaned up. This will need to be notified at the time the policy is taken out with IAG where cover for meth will be determined by underwriting.
Why is there such a large excess applying to this cover?
It is important that everyone takes responsibility for tackling the growing social issue of meth addiction, and the subsequent costs of damage. As a property owner we believe it is important to ensure that tenants are vetted and properties managed correctly to reduce the risk of meth contamination.
Policy Cover for Motor Policies
What is included in the cover?
Car, Third Party, Fire & Theft, Vintage & Classic Car, Caravan and Truck & Domestic Tractor Policies now include cover for contamination damage to the vehicle, provided it occurs in connection with the theft or illegal conversion of the vehicle.
What is not included in the cover?
Meth contamination that involves you, your spouse, or family member is not covered (including the theft or illegal conversion by any of them). While we recognise the personal risk, we belive this should be managed within the family. This includes cars that are owned by a trust or company, where the contamination was caused in connection with a trustee, beneficiary director or shareholder.
Measuring and testing meth contamination
How is meth contamination damage measured?
Standards New Zealand are developing guidelines for safe meth contamination limits, the recommendation is to move to 1.5 micrograms of methamphetamine per 100sq cm (1.5ug/100cm²) of surface area for contamination through use. The Ministry of Health (MoH) have adopted this limit as an interim de-facto measure and IAG will apply this for all claims for meth consumption notified from 21 Feb 2017. We will continue to apply the rate of 0.5ug/100cm² (0.5) for meth labs.
How is meth contamination damage identified?
Indicator test kits are often used to screen for the presence of meth. Where meth is detected, an independent testing company will gather a number of test samples to identify the individual levels of contamination in each area. A laboratory then analyses the test samples and provides a report on each test sample. Any results above the contamination standard mean remediation work is required. To establish that meth contamination has policy coverage, you are required to provide results based on an appropriate lab test that shows that contamination exceeds the standard. If the test is positive, the costs of the test are covered and included as part of the policy sub-limit. Contact us for a list of meth testers and decontaminators that have passed IAG’s qualification process.
What happens if meth contamination is identified but it is below the limits?
Where the contamination levels of all areas tested are below the standard / guidelines, the experts will conclude that the property is safe and no remediation or decontamination work is necessary. This may mean that there are some levels of contamination present but they do not pose a health risk and do not need to be remediated.
If a claim is accepted, to what level do we decontaminate?
Expert advice is sought to determine the most appropriate remediation programme needed to reduce contamination. IAG will, up to the policy limit, less the policy excess, cover the cost of remediating contamination to below the NZ Standard or recommended limit. We will work with you, the meth consultants and decontamination specialists to reduce the meth to a level that is considered safe.
Meth Contamination Claims
Who is involved in resolving meth contamination claims?
Our claims teams work closely with our Loss Adjusters when determining the best claim outcome. They will engage the relevant testing and decontamination service providers who will draft an appropriate response and plan of action. Where the claim is accepted IAG will normally then settle the quoted value of the remediation to allow you to manage the remediation process, this includes the estimated loss of rents or alternative accommodation cost for the period while the home cannot be occupied.
Who are the accredited sampling and testing operators in New Zealand?
We recommend that you get sampling, testing and decontamination works carried out by a supplier that has passed IAG’s qualification process. A list of suppliers is available from your loss adjuster or claims person.
Who pays for testing?
When meth contamination is identified, IAG requires the results of a comprehensive test to lodge a claim. Test costs will be reimbursed if the results are above the guidelines. Post remediation testing will be paid for by IAG (they will be treated as a claims handling expense). These costs are in addition to the cover limits of the policy.
How do meth claims impact the insured’s ongoing cover?
To retain meth cover under the policy, you will need to provide a post decontamination clearance certificate within a reasonable timeframe (normally 6-8 weeks after the claim has been paid). Ongoing insurance will only cover any subsequent loss for further damage from meth contamination that has occurred as a separate event.
Information for Landlords
What are landlord’s obligations under the new property cover?
As a landlord, do I have to do the extra identification and reference checks for a tenant already in the property?
The new landlord’s obligations apply to a policy at renewal, so an existing tenant does not have to be treated like a new tenancy. If someone new moves in as part of the existing tenancy however, they will need to be treated like a new tenant and the appropriate checks undertaken. We do expect landlords to have complied with the obligations that existed under their policy with us when the tenancy began.
As a landlord, when do I need to meet the new obligations if the tenancy started before the new meth cover?
For tenancies that started before the new meth cover was offered - provided the landlord has met their policy obligations in place at the start of the tenancy, we will consider this as having met the requirements of the policy. However, once the policy has renewed on to a new wording version that includes the revised meth cover, the new obligations will need to be met from the renewal of the policy. If a new tenancy starts after the policy has renewed on to a new wording version that includes the revised meth cover, all landlord obligations will need to be met.
As a landlord, am I covered for liability?
Liability cover is also included for landlords, subject to a previously clear meth test. This is to provide cover where, for example, a tenant claims for cross-contamination of their property, even where no liability can be shown because legal defence costs may still be incurred. It’s important to note that while a meth test at the start and end of each tenancy is recommended but is not a requirement of the policy, having a clear test is a requirement for liability cover. Landlords can chose to undertake the test immediately or with the change of tenant, but no liability cover is in place until a clear test has been received.
What can the landlords do to reduce / prevent Meth contamination to property?
Landlords or property managers need to regularly check for any signs of Meth during and between tenancies. We have tighter conditions surrounding this, refer to the comprehensive meth booklet here for warning signs of meth and our landlord obligations.
If you’d like to know more, get in touch on 0800 100 200 or pop into a local AMI store. Or if you’re insured with another brand in the IAG family then please speak to your insurer or broker directly.