Motelier left in the lurch

Peter Fischer. Photo / Supplied

A Motelier owed more than a quarter of a million dollars by a defunct insurance company is furious that Canterbury policyholders are likely to be paid while he's left with a mountain of bills.

Peter and Claire Fischer's Clansman Motel in Waipu Cove, Northland, was wrecked by flooding last year and his insurance company, Western Pacific, approved $280,000 of repair work.

Soon after the repairs were complete, the Herald on Sunday broke the news Western Pacific was in financial trouble. It went into voluntary liquidation the following week.

A High Court ruling late last year said Canterbury policyholders were solely entitled to the $33 million available to pay claims, leaving other claimants unlikely to receive a cent.

Fischer, 84, says he is frustrated the funds will not be divided evenly. "This was a natural disaster, too, but we get nothing," he says.

Instead of enjoying a slower pace as he approaches his 85th birthday, Fischer has worked seven days a week to earn enough to pay those who repaired his property. Sixteen months after the floods, just $20,000 is outstanding.

"In a period of a year we've pulled this place up by the bootstraps," he says. "We work hard, we don't have days off, we don't have staff. We were in up to our eyeballs. It's been a long and arduous battle and it's not over yet."

Fischer, who has come out of retirement six times, asked the Earthquake Commission if he was entitled to its cover but EQC covers only damage to residential land, not businesses. Western Pacific owes another $1 million to New Zealanders with claims unrelated to the Christchurch earthquakes. The latest liquidation report says that if the reinsurance money were split evenly, every claimant would receive about 50c in the dollar.

Liquidators from Grant Thornton declined to comment and would not discuss if there were plans to appeal.

Go for the best is insurer's advice

Inurance Brokers Association chief executive Gary Young says to go for the best cover you can get when insuring your house and business.

"You're protecting your biggest asset," he says.

"Look for a highly rated company that's been around for a while.

"The big danger is going for the cheap price," he says.

Western Pacific was a small, Kiwi-owned company known for cut-rate prices but its B rating meant some insurance broking firms did not sell its policies, Young says.

"Unlike AMI, Western Pacific was a little company, so the Government didn't feel obliged to bail them out."

Young says it is wiser to save money on cheaper car insurance. "When it comes to your car you can afford to take more of a gamble because it's not going to be the end of the world."