[Adopted 7-11-1995 as Ord. No. 7-1995]
No insurance company, association or exchange (hereinafter the "insurer")
doing business in the Commonwealth of Pennsylvania shall pay a claim of a
named insured for fire damage to a structure located within the borough where
the amount recoverable for the fire loss to the structure under all policies
exceeds seven thousand five hundred dollars ($7,500.) unless the insurer is
furnished by the borough's Treasurer with a certificate pursuant to § 508(b)
of the Act and unless there is compliance with the procedure set forth in
§ 508(c) and (d) of the Act.
When all municipal claims and municipal expenses have been paid pursuant to §
138-2, or where the Treasurer has issued a certificate described in §
138-2B(1) indicating that there are no municipal claims or municipal expenses against the property, the insurer shall pay the claim of the named insured; provided, however, that if the loss agreed upon by the named insured and the insurer equals or exceeds sixty percent (60%) of the aggregate limits of liability on all fire policies covering the building or structure, the following procedures must be followed:
A. The insurer shall transfer, from the insurance proceeds
to the Borough Treasurer, in the aggregate, two thousand dollars ($2,000.)
for each fifteen thousand dollars ($15,000.) of such claim or fraction thereof.
B. If at the time a loss report is submitted by the insured
such insured has submitted to the insurer, with a copy to the borough, a contractor's
signed estimate of the costs of removing, repairing or securing the building
or other structure in an amount less than the amount calculated under the
foregoing formula, the insurer shall transfer to the Borough Treasurer, from
the insurance proceeds, the amount specified in the estimate. If there is
more than one (1) insurer, the transfer of proceeds shall be on a pro rata
basis by all insurers insuring the building or other structure.
C. Upon receipt of the above-described portion of the insurance
proceeds, the Borough Treasurer shall do the following:
(1) Place the proceeds in a separate fund to be used solely
as security against the total municipal expenses anticipated by the borough
to be required in removing, repairing or securing the building or structure.
Such costs shall include, without limitation, all engineering, legal or administrative
costs incurred by the borough in connection with such removal, repair or securing
or any proceedings related thereto.
(2) Mail to the named insured, at the address received from
the insurer, a notice that the proceeds have been received by the borough
and that the procedures enacted herein shall be followed.
(3) After the transfer of the proceeds into the separate
fund, the named insured may submit to the borough a contractor's signed
estimate of the costs of removing, repairing or securing the building or other
structure, in which event the Borough Treasurer shall, if such estimate is
deemed by the Treasurer to be reasonable, return to the insured the amount
of the funds transferred to the borough in excess of that required to pay
the municipal expenses already incurred, provided that the borough has not
commenced to remove, repair or secure the building or other structure, in
which case the borough will complete the work and deduct the municipal expenses
incurred from such separate fund.
(4) Pay to the Borough Manager, for reimbursement to the
borough general fund, the amount of the municipal expenses paid by the borough.
(5) Pay the remaining balance in the separate fund (without
interest) to the named insured upon receipt of a certificate issued by the
Code Enforcement Officer of the borough (or other applicable official of the
borough) that the repair, removal or securing of the building or other structure
has been completed in accordance with all applicable ordinances, codes and
regulations of the borough.
D. Nothing in this Article shall be construed to limit the
ability of the borough to recover any deficiency in the amount of municipal
claims or municipal expenses recoverable pursuant to this Article or recoverable
under any other state law, or other ordinance, or to insurance proceeds, by
an action at law or equity to enforce the ordinances, codes and regulations
of the borough or to enter into an agreement with the named insured with regard
to such other disposition of the proceeds as the borough may deem reasonable.
Any owner of property, any named insured or insurer who violates the
provisions of this Article or who shall fail to comply with any of the requirements
hereof shall be liable, upon summary conviction, to a fine and penalty of
not less than one hundred dollars ($100.) nor more than one thousand dollars
($1,000.), which fine and penalty may be collected by suit or summary proceeding.