Left High And Dry

Newcastle Herald

Tuesday March 4, 2008

By JOANNE McCARTHY

EIGHT months, 98,000 claims and $1.47 billion in payouts after the Pasha Bulker storm of last June, two of the world's biggest insurance companies are holding out against a Cardiff club and a Wallsend restaurateur.

British insurer Lloyd's and US insurer ACE argue that hundreds of thousands of dollars in damage to Cardiff RSL Club and Destiny's on Nelson restaurant was the result of flooding rather than a storm.

In the case of Destiny's restaurant, the insurer's position requires water to run uphill.

"They appear to be arguing the creek flooded, the water ran uphill, did a left and went through the restaurant and I'm not joking," said Palmer Bruyn principal surveyor Chris McNaughton, who found Destiny's was inundated after water from a nearby hill overwhelmed Nelson Street.

"It's ridiculous."

When Destiny's drowned on June 8, the only comfort for owner Brad Jones, a father of six, was that "at least we were fully insured, through a company heavily promoted by the Restaurant and Catering Association".

His claim for nearly $500,000 was rejected after ACE found the damage was because of flooding, not the storm, and a $100,000 flood payout limit was imposed.

Mr Jones used the money to pay creditors and his staff until August and battled the multinational since.

"If they'd even paid another $100,000, we would have been up and trading again in three months but instead I'm back working to keep food on the table and our dream of owning a restaurant is gone," he said.

"I've had my breakdown moments over it, I can tell you, because it's crazy, absolutely crazy what they're doing."

In a letter to ACE, insurance consultant Alastair Mitchell, who is called as an expert witness in insurance court cases, said the family should be compensated for the delay and trauma.

"In my 45 years' experience in the business I have not seen a situation where an insured client has been more unfairly treated," he said.

Cardiff RSL Club is out of pocket nearly $300,000, because insurer Lloyd's declined an inundation claim after June 8.

Lloyd's argued the damage was caused by flooding and not by a storm.

Wallsend MP Sonia Hornery said most insurers reimbursed clients quickly and fairly, however, others had been "very recalcitrant and very difficult to deal with".

An ACE spokeswoman requested questions in writing and declined to comment.

© 2008 Newcastle Herald

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