[HISTORY: Adopted by the Board of Commissioners of the Township of Patterson: Art. I, 8-10-1995 as Ord. No. 342. Amendments noted where applicable.]
Editor's Note: This ordinance also superseded former Ch. 104, Art. I, Fire Insurance Claims, adopted 12-10-1992 as Ord. No. 323.
Article I Fire Insurance Claims
[Adopted 8-10-1995 as Ord. No. 342]
The Commonwealth of Pennsylvania previously enacted Act 98 of 1992, amending the Insurance Company Law of 1921, to provide procedures for the payment of certain fire loss claims. Then, pursuant to Act 93 of 1994, Section 508, of the Insurance Company law of 1921, was amended to charge the Dept. of Community Affairs with the requirement of preserving a register of municipalities which have enacted and filed with the Department, Fire Insurance Escrow ordinances. The Commissioners of the Township of Patterson find it necessary and advisable, and declare the purpose of this Article to be, to deter the commission of arson and related crimes, to discourage the abandonment of property, to prevent blight and deterioration and to provide for the collection of delinquent municipal taxes, assessments, penalties and user charges against real estate by adopting this Article pursuant to Section 508 of the insurance Law of 1921 to provide for the payment of proceeds from certain fire loss claims to the Township.
The President of the Board of Commissioners or such official's designee is hereby anointed as the designated officer who is authorized to carry out all responsibilities and duties stated herein.
No insurance company, association or exchange (hereinafter the "insuring agent") doing business in the Commonwealth of Pennsylvania shall pay a claim of a named insured for fire damage to a structure located within the Township of Patterson (hereinafter the "Township") where the amount recoverable for the fire loss to the structure under all policies exceeds seven thousand five hundred dollars ($7,500.), unless the named insured or insuring agent is furnished by the Township Treasurer with a municipal certificate pursuant to Section 508(b) of Act 98 of 1992 and unless there is compliance with Section 508(c) and (d) of Act 98 of 1992, and Act 93 of 1994, and the provisions of this Article.
Editor's Note: See 40 P.S. § 638(b), (c) and (d).
Where, pursuant to Section 508(b)(1)(ii), of Act 98 of 1992, et al, the Township Treasurer issues a certificate and bill for delinquent taxes, assessments, penalties and user charges against the property and also the total costs, if any, incurred by the Township for the removal, repair or securing of a building or other structure on the property, the insuring agent shall transfer to the Township Treasurer an amount from the insurance proceeds necessary to pay the taxes, assessments, penalties, charges and costs as shown on the bill, which amount shall be flied or credited by the Township to payment of the items shown on the bill.
Editor's Note: See 40 P.S. § 638(b)(1)(ii).
Where pursuant to Section 508(b)(1)(i), of Act 98 of 1992, et al, the Township Treasurer issued a certificate indicating that there are no delinquent tees, assessments, penalties or user charges against real property, the insuring agent shall pay the claim of the named insured; provided, however, that if the loss as agreed upon by the named insured and the insuring agent 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:
Amount to be transferred.
The insuring agent shall transfer from the insurance proceeds to the designated officer of the Township in the aggregate of one thousand dollars ($1,000.) for each twenty thousand dollars ($20,000.), and each fraction of that amount, of claim; or
If, at the time of a proof of loss agreed to between the named insured and the insuring agent, the named insured has submitted a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure, the insuring agent shall transfer to the Township from the insurance proceeds the amount specified in the estimate.
The transfer of proceeds shall be on a pro-rata basis by all companies, associations or exchanges insuring the building or or other structure.
After the transfer, the named insured may submit a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure, and the designated officer shall return the aunt of the funds transferred to the Township in excess of the estimate to the named insured, if the Township has not commenced to remove, repair or secure the building or other structure.
Upon receipt of proceeds under this section, the Township shall do the following:
The designated officer shall place the proceeds in the fund to be used solely as security against the total costs of removing, repairing or securing the building or structure which are incurred by the Township. Such costs shall include, without limitation, any engineering, legal or administrative costs, incurred by the municipality in connection with such removal, repair or securing of the building or any proceeding related thereto.
It is the obligation of the insuring agent when transferring of the proceeds to provide the township with the name and address of the named insured. tan receipt of the transferred funds and the name and address of the named insured, the designated officer shall contact the named insured, certify that the proceeds have been received by the Township and notify the named insured that the procedures under this subsection shall be followed.
When repair, removal or securing of the building or other structure has been completed in accordance with all applicable regulations (including verification that the structure is in compliance with the building code) and orders of the Township and the required proof of such completion received by the designated officer, and if the Township has not incurred any costs for repairs, removal or securing, the funds shall be returned to the named insured. If the Township has incurred costs for repairs, removal or securing of the building or other structure, the costs shall be paid frog the funds, and, if excess funds remain, the Township shall transfer the remaining funds to the named insured.
To the extent that interest is earned on proceeds held by the Township pursuant to this subsection and not returned to the named insured, such interest shall belong to the Township. To the extent that proceeds are returned to the named insured, interest earned on such proceeds shall be distributed to the named insured at the time that the proceeds are returned.
Nothing in this section shall be construed to limit the ability of the Township to recover any deficiency. Furthermore, nothing in this section shall be construed to prohibit the Township and the named insured fiat entering into an agreement that permits the transfer of funds to the named insured if some other reasonable disposition of the damaged property has been negotiated.
Editor's Note: See 40 P.S. § 638(b)(1).
The Board of Commissioners may by resolution adopt procedures and regulations to implement Act 98 of 1992 and Act 93 of 1994 and this Article and may by ordinance fix reasonable fees to be charged for municipal activities or services provided pursuant to Act 98 of 1992 and Act 93 of 1994, and this Article, including but not limited to issuance of certificates and bills, performance of inspections and opening separate fund accounts.
Editor's Note: See 40 P.S. § 636.1 and 40 P.S. § 638 et seq.
Any owner of property, any named insured or any insuring agent who violates this Article shall be subject to a penalty of up to one thousand dollars ($1,000.) per violation.