Premium hurts, excess kills

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Insurance is hard to get in Queenstown’s flood zone – and when you do, your policy conditions are severe. 

Geoff Bruhn of Rothbury Insurance Brokers says independent businesses find it virtually impossible to get cover but franchises or branches of big chains may sneak under the radar via nationwide policies. 

If you’re covered, it’s not so much the premium that bites as the excess – some firms have to pay the first $50,000 on claims, he says. 

Stand-downs are the other flood-zone penalty. Business-interruption cover normally kicks in as soon as a firm stops trading, but inside Queenstown’s watery zone you probably won’t be covered for the first 14 days. 

This latest flood will see some insurers refusing to renew existing policies, Bruhn predicts. 

It’s consequences like this which led to local millionaire developer/landlord John Martin’s decision 11 years ago to quit the flood-zone. 

Hammered by the 1999 floods, over the following decade Martin sold Steamer Wharf, the National Bank building and what’s known as Archer’s Cottage on Marine Parade. 

“I’m relieved my decision has been vindicated by subsequent events,” Martin says. “And I think those who’ve [since] bought into the flood zone should be aware of the circumstances into which they’ve bought. 

“We’ve got away with it this time,” he warns. “But my advice would be to plan for the future.”