Cracking down on meth contamination
Depending who you listen to, the issue of meth contamination in New Zealand is either
- Of such little concern, we don’t need to bother testing properties or
- Meth contamination is an issue affecting between 40% and 50% of all properties tested in New Zealand. (Results of testing companies)
Regardless, the fact is, methamphetamine use and manufacture have been an issue in New Zealand for at least 25 years. Kiwis are great meth cooks achieving a high level of purity hence we call meth ‘P’ for pure and, we achieve some of the highest prices per gram in the world.
Meth users and meth labs are highly mobile, and each ‘cook’ contaminates multiple locations. Contamination levels can reach tens of thousands of micrograms when a meth lab goes undetected.
Meth contamination has been detected in cars, caravans, mobile homes, boats, bachs, apartments, residential homes including luxury homes, offices and commercial buildings, motels, hotels, short term holiday lets and vehicles.
Fact #1: Around32% of long-term meth users in New Zealand will try to manufacture meth. (Refer Massey University 2011 annual illicit drug monitoring study)
Decreased testing – increased risk
On 29 May 2018, a report was released by the Office of the Prime Minister’s Chief Science Advisor, Professor Sir Peter Gluckman.
Following the release of the Gluckman report, the number of meth tests declined, and meth risk increased as tenants and gangs were effectively given carte blanch to smoke and cook meth without fear of detection or risk of being held accountable.
This occurred partly because the report stated, ‘exposure to methamphetamine levels below 15 μg/100 cm2 would be highly unlikely to give rise to any adverse effects.’
Unsurprisingly, the Government implemented the increased ‘acceptable’ level in their state housing portfolio. Around 220 state homes that had previously been unrentable due to meth contamination, became available to rent without the requirement for decontamination. The Tenancy Tribunal, as a Government agency, also applies the higher level. We understand that no other country in the world has ‘acceptable’ levels this high.
Currently the New Zealand insurance sector are mostly referring to NZS8510 and applying the ‘acceptable’ level of 1.5 μg/100 cm2 when assessing meth contamination claims.
Another contributing factor to the decrease in meth testing was this statement in the Gluckman report : ‘testing is only recommended where meth lab activity is suspected or where very heavy use is suspected.’
This statement is problematic for the following reasons:
- While a person with meth risk management experience could list 20 plus signs that indicate meth use/manufacture, most people lack the training and experience to list even five!
- If you wait until you suspect a meth lab and/or heavy use, the contamination levels are likely to already exceed the ‘acceptable’ level and necessitate an insurance claim
- Without a meth test at the start of a tenancy, there is no deterrent factor and a landlord cannot hold the tenant accountable. In fact, the tenant who caused the contamination could hold the landlord accountable for placing them in a property that was not habitable.
- High-level contamination situations are often only discovered when the property is put on the market and tested as part of pre-purchase due diligence. Property values can be impacted as high-level contamination is likely to involve the Council and is recorded on the Land Information Memorandum (LIM).
The photos below demonstrate how meth labs can go undetected in a building where hundreds of people reside. The lab was only discovered because NZ Police executed a warrant. The highest level detected in the apartment was 40 μg/100 cm2.
Photo supplied by MethSolutions: Meth lab set up in an apartment.
Photo supplied by MethSolutions: Same apartment 7 months and $49,000 later
The risk of meth contamination is higher for owner occupiers of apartments compared to residential property. This is due to the transient nature of apartment renters, anonymity between neighbours, shared air systems and windows in close proximity.
And most importantly, it’s likely the insurer will consider the contamination as ‘one event’ even if multiple apartments are contaminated so a maximum of $50,000 cover.
Fact #2: The longer a meth issue remains undetected, costs increase, and behaviour can escalate from meth use to meth manufacture.
With a regular testing regime, meth contamination will be detected early, and the level is unlikely to exceed 1.5 micrograms/100cm2.
Conversely a meth issue that goes undetected causes contamination levels which are most likely going to exceed 1.5 micrograms/100cm2 and the sum insured may not cover the costs the property owner faces.
Reducing leakage for meth contamination claims
The economic purpose of insurance is risk management.
We believe there are opportunities for the insurance sector to reduce meth claims and the management costs and here’s a starting point:
1. Educate insureds with fact-based information
- Results from independent accredited labs
- Detail actual costs versus with the sum insured
- Explain the negative impacts for the owner including stress, loss of rent, decreased property value due to LIM record, ongoing stigma even once remediated
- Significant financial implications for apartment owners regarding ‘one event’ sum insured situation
2. Lower premiums or rebates for insurers who proactively manage meth risk by engaging reputable testing companies
- Evidence of pre and post tenancy surface swab testing minimum of 3 monthly intervals with lab-based analysis of the samples taken by a reputable company (not DIY test kits)
- Evidence of pre-purchase meth tests in dwellings and vehicles
- 24/7 monitoring with devices designed to detect meth manufacture
- Evidence of surface swab testing prior to any major renovations to mitigate situation where historical meth contamination bleeds back through newly renovated surfaces requiring significant remediation and increasing costs
Educate claim managers
To mitigate leakage with meth contamination claims, it is important claim managers have the experience to identify potential issues at the start of the claim and understand the following:
- How meth is used and how contamination occurs
- How meth residue behaves on different materials and ensure these materials are tested prior to decontamination
- The relevance of following the NIOSH9111 sampling technique and how not following this directly impacts results
- Different collection methods and how these impacts the results i.e.: individual samples, versus a composite sample or a composite of a composite sample.
- How to read a lab analysis report, confirm the collection method and interpret the results
Depending on the level, a positive initial screening test is the start point that triggers detailed room by room individual testing. These results in conjunction with the testing companies’ recommendations form the decontamination plan.
When reviewing the detailed meth test report and results, the Claim Manager will need to draw on their experience and ensure the following:
- Relevant number of samples have been taken as per NZS8510 (The Standard)
- Sampling method followed NIOSH9111 technique
- All areas have been tested including out buildings
- High risk materials have been tested
- All items involved with air flow are tested
- Technicians recommendations are clear and relevant regarding decontamination
- Decontamination specialists understand the results and have a detailed plan
Fact #3: If the detailed testing has failed to account for the above, the decontamination process is likely to be ineffective and the property will require further testing and cleaning which escalates claim costs.
Other opportunities for insurers
When property owners are educated and understand meth risk, they are more likely to consider upgrades to their policies and accept increased premiums including:
- Reduction in excess
- Increased sums insured
- Special cover for apartments
At Mainland Claims Management our Auckland based loss adjuster, Debra Young, has managed hundreds of meth contaminated properties in her previous role in meth risk management. Debra is available to manage meth claims, to peer review meth test reports and she is happy to present to your team at your training days.
We look forward to continuing to provide a high level of service in claims management and if you have any questions relating to meth contamination please contact Debra on 0277 55445 or via email firstname.lastname@example.org