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Higher meth test levels, lower premiums

Introduction of higher meth testing levels, as recommended by Sir Peter Gluckman’s game-changing meth report, would lead to insurance premiums coming down, according to one insurer.

Friday, July 27th 2018, 12:10AM

by Miriam Bell

The report, which looked into the health risks of third hand exposure to meth in residential properties, found that where meth has been used – rather than manufactured – it poses a negligible health risk.

It also suggested the revision of the current testing regime and the introduction of much higher testing levels (15 micrograms per 100cm2 as opposed to 1.5 micrograms per 100cm2).

Initio founder Rene Swindley says that if the 15 mg level was adopted as the standard for meth testing that would, eventually, lead to insurance premiums decreasing.

That’s because insurers have been paying out for big meth claims at the 1.5 mg level for some time now and those pay-outs have been one of the major reasons for premium increases in recent years.

“It would take a while for insurers to see profitability for it and for the changes to wash through to premiums. But, ultimately, underwriters would take it into account.”

But he also says that until the existing standard is changed or the Ministry of Health adopts Gluckman's recommended level in its guidelines, the 1.5 mg level technically remains the safe level.

“I doubt there are any insurers that are keen to go against that accepted level. So our hands are tied and we are still paying out claims for properties that test positive for meth but at low levels which don’t indicate meth manufacture.”

Swindley says it is time for the madness to stop and Gluckman’s recommended level to be adopted. That would mean the same level is applied across the board by everyone, including insurers.

It would clarify the current situation where some organisations have adopted the 15 mg level while others are sticking to the 1.5 mg level, he says.

“I think Housing Minister Phil Twyford is aware of the confusion and, like many, I’m waiting with bated breath for an announcement that will clear up the situation.

“Should that happen insurance policies will change and premiums will go down but, at the moment, the situation is continuing to put pressure on premiums.”

Read more:

Tribunal sticks to existing meth standard 

Higher meth test levels for REA 

Meth report bombshell: what it means 

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Lender Flt 1yr 2yr 3yr
AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 4.89 - -
Co-operative Bank - Owner Occ 6.25 4.99 5.39 5.69
Co-operative Bank - Standard 6.25 5.49 5.89 6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 4.79 ▼5.15 ▼5.14
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 ▼5.50 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 4.79 5.15 5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 ▼6.59
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 ▼5.69
Liberty ▲5.34 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society 6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 5.39 5.79 5.99
SBS Bank Special - 4.89 5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 5.65 6.09 6.39
TSB Special 6.25 4.85 5.29 5.59
Unity 5.65 ▲5.45 ▲5.75 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 5.55 6.05 6.29
Westpac - Offset 6.39 - - -
Westpac Special - 4.95 5.45 5.69
Median 6.34 5.35 5.79 5.83

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