The owners of hair salon Ginger Meggs are exhausted and heartbroken after a three-year battle over their insurance.
The business went bust last week but Mike and Glynis Hamel will keep working as employees at the salon in Ballantynes under new management.
Before the February 2011 quakes, the Hamels were running one of the country's most successful hair salons. They had been in the business for more than 20 years, their clients included the All Blacks and they had won multiple awards.
Last week, the company went into liquidation owing hundreds of thousands to the Inland Revenue Department (IRD).
Glynis was in tears and Mike was wringing his hands as they told The Press what happened. On February 22, 2011, the couple lost their salon in the central city and their home in Sumner.
"We were running around, confused, shell-shocked, trying to think of our clients and staff," Glynis said.
Their insurance broker advised them to find a new location as soon as possible to minimise the business interruption claim. They found a derelict location in Avonhead, and with their friends' help fitted it out and reopened two weeks after the quakes.
But with many people fleeing the city and an unfamiliar new location, the business lost more than 30 per cent of its clientele. The Hamels kept going, thinking their business interruption insurance would take care of the losses.
A year later, they hired an insurance specialist to help them put the business interruption claim together. They had lost more than 30 per cent of revenue in the year after the quakes.
However, the insurer would only cover 10 per cent of the claim because their business was located in the red zone.
"When you sign your policy, you feel safe that you will be looked after. We paid BI insurance for 24 years and never had any claims until the quakes. They let us down," Mike said.
The couple asked lawyers for advice and were told they should contest the insurer's decision.
"We got ourselves into a bigger mess. Waiting and waiting and trusting that we would be looked after by our insurance company."
Dean Lester, a former insurance broker who helped found an earthquake advice trust, the Canterbury Insurance Advocacy Service (CIAS), said several insurance companies tried to use the "depopulation" argument early on after the quakes.
Some insurers would not compensate the losses due to the central city being cordoned off, arguing that this was outside of their cover.
Lester said Ginger Meggs was a destination salon - people did not simply pass by and walk in, they came especially to get their hair cut by award-winning hairdressers. He believed the depopulation argument should not apply in their case.
He said the Hamels were vulnerable, and the insurance company should have provided more support "when the insured was at such a disadvantage".
"Insurance companies will look for ways not to pay," he said.
Lester said Ginger Meggs did not get the appropriate cover and that it was "incredibly gutting".
In April 2013, the couple returned to Ballantynes and lost some of their clients again.
"People didn't want to come into town," Glynis said.
Ginger Megg's insurer never met face to face with the couple to discuss the case. The couple was advised to take the insurer to court, but they had run out of time, money and hope.
Lawyers, IRD bills and stress piled up until the couple was no longer in a position to negotiate with the insurance company.
They settled for about 30 per cent of their claim a couple of months ago.
"We accepted the settlement because we were desperate after negotiating with IRD for 18 months," Mike said.
Unfortunately, it was too little money too late, and IRD succeeded in its application to the High Court to have the company placed in liquidation. .
"What they (the insurer) gave us was not even enough to pay for the lawyers."
Do you feel better off than at this time last year?