If you sense such a high danger from this stuff then the only responsible thing you can do is not to have it anywhere around your home or family. Beyond all else, you don't want to be lying in bed at night worrying what might happen in the event of a mishap and if it will put you and your family on the street if it does. The peace of mind alone can't be worth the risks.

Using Methanol to make Bio also has a lot of dangers from inhalation of the fumes to explosions caused by the vapors. There have been a multitude of reports of explosions in reactors and fires caused through the manufacturing of biodiesel in the home environment.

You need to be fully aware of the dangers of using this very toxic chemical, not to mention the others involved, around your home so you can try to minimize the risks involved.

While your insurance company may cover you for something like petrol which is a normal everyday substance around a home and used for normal domestic purposes, something that normally has no place around a home like methanol which is a chemical you were using for producing reactions to make motor fuel with other dangerous chemicals in uncertified, home built equipment, may be something else. Even if there were a fire or problem caused by something other than your Biodiesel production, your insurance company may decline to cover you for failing to disclose your Bio production activities and equipment.

You could have a tree branch come through your roof and if the insurance assessors came out and saw you had Methanol and Biodiesel reactors buried under the debris, They may use that as a reason to decline your claim. They can do that as your policy will have a notation of your duty of disclosure which I am pretty sure will say that failing to give them relevant information is grounds for cancellation of the policy and any claims. Remember, they don't look for reasons to pay you, they look for reasons to get out of handing over money!

I think you would be very wise to be honest and ethical about this and ask your insurance company upfront about what you are wanting to do and check with any requirements they have. You should also check with your local council and see what their rules and regulations are in regards to chemical process manufacturing in residential premises and what their limitations are on storage of dangerous chemicals, waste by product and waste oil. I would get something in writing from them and your insurance company to say you are covered in the event of mishap.

As the meth and oil are flammable materials, The fire Brigade may also have a stake in this as well so best to check with them too.
You wouldn't want to be out hundreds of thousands of dollars in the value of your home (or have a debt for something you couldn't live in!) for the sake of a few hundred dollars worth of cheap fuel.

Better to be safe than sorry!