Insurance giant IAG pays $14m a year for meth claims

IAG has detailed the scope of P claims in rental properties. Photo/Dean Purcell

IAG businesses pays out on 40 to 80 P claims every month

The country's largest insurer says it pays out $14 million methamphetamine claims on residential properties.

Ralph Hart, Insurance Australia Group New Zealand's personal lines underwriting solutions manager, said most claims in tenanted properties were for meth use.

"IAG meth claims tally about $14m per year, with claim numbers varying from 40 to 80 each month," he said of all types of residential properties.

"The majority of claims relate to meth use. Claims are generally spread geographically in line with population and the pattern of these claims is still not clear but average claim cost for meth contamination is approximately $20,000," Hart said.

IAG has the AMI, State, NAC, NZI, Lumley and Lantern insurance brands and covers more than half all New Zealand's properties.

Hart said IAG insured about a quarter around half of the country's 450,000 rental properties. Based on his statement, that amounts to more than 225,000 rented properties.

No devices were available to warn landlords that P was being smoked in a property, only to warn of meth labs, he said. Landlords should test properties between tenancies, he said.

A new meth standard is being developed in New Zealand. Last year, the Ministry of Health recommended a different level be used to guide clean up of properties where meth had been used compared to meth lab homes, IAG noted.

Its report recommends a level of 0.5 micrograms for lab homes, 1.5 micrograms for carpeted homes where it has only been consumed and 2 micrograms for non-carpeted homes, IAG said.

"At larger quantities, methamphetamine is hazardous, and its manufacture dangerous. In homes where the drug has been cooked, methamphetamine residue is the 'canary in the cage' warning for the presence of other toxins, such as solvents and heavy metals," IAG said.

However, in properties where it had only been smoked, "methamphetamine means potential exposure to low concentrations of the drug on surfaces with a much reduced risk of toxicity", IAG said.