[HISTORY: Adopted by the Borough Council of the Borough of
Lehighton 9-22-2006 by Ord. No. 544-2006. Amendments noted where applicable.]
The Borough Manager of Lehighton Borough or such official's
designee is hereby appointed as the designated officer who is authorized
to carry out all responsibilities and duties stated herein.
No insurance company, association or exchange (hereinafter the
"insurance agent") doing business in the Commonwealth of Pennsylvania
shall pay a claim of a named insured for fire damage to a structure
located within Lehighton Borough (hereinafter the "Borough") where
the amount recoverable for the fire loss to the structure under all
policies exceeds $7,500, unless the named insured or insuring agent
is furnished by the Municipal Treasurer with a municipal certificate
pursuant to § 508(b) of Act 98 of 1992, as amended, and
unless there is compliance with § 508(c) and (d) of Act
98 of 1992, as amended, and the provisions of this chapter.
Where, pursuant to § 508(b)(1)(i) of Act 98 of 1992,
the Municipal Treasurer issues a certificate indicating that there
are no delinquent taxes, 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 agreed upon by the named
insured and the insuring agent equals or exceeds 60% of the aggregate
limits of liability on all fire policies covering the building restructure,
the following procedures must be followed:
A.
The insuring agent shall transfer from the insurance proceeds to
the designated officer of the Borough in the aggregate of $2,000 for
each $15,000 of a claim and for a fraction of that amount of a claim,
a section to be applied such that if the claim is $15,000 or less,
the amount transferred to the Borough shall be $2,000; or
B.
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 Borough from the insurance proceeds the amount specified in the
estimate.
C.
The transfer of proceeds shall be on a pro rata basis by all companies,
associations, or exchanges insuring the building or other structure.
D.
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 amount of the funds transferred to the Borough in excess of the
estimate to the named insured, if the Borough has not commenced to
remove, repair or secure the building or other structure.
E.
Upon receipt of proceeds under this section, the Borough shall do
the following:
(1)
The designated officer shall place the proceeds in the separate 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 Borough. Such costs shall include, without limitation, any
engineering, legal or administrative costs incurred by the Borough
in connection with such removal, repair or securing of the building
or any proceedings related thereto.
(2)
It is the obligation of the insuring agent when transferring the
proceeds to provide the Borough with the name and address of the named
insured. Upon 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 Borough
and notify the named insured that the procedure under this subsection
shall be followed.
(3)
When repairs, removal or securing of the building or other structure
have been completed in accordance with all applicable regulations
and orders of the Borough and the required proof of such completion
received by the designated officer and if the Borough has not incurred
any costs for repairs, such removal or securing, the fund shall be
returned to the named insured. If the Borough has incurred costs for
repairs, removal or securing of the building or other structure, the
costs shall be paid from the fund, and if excess funds remain, the
Borough shall transfer the remaining funds to the named insured.
(4)
To the extent that interest is earned on proceeds held by the Borough
pursuant to this section and not returned to the named insured, such
interest shall belong to the Borough. 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.
F.
Nothing in this section shall be construed to limit the ability of
the Borough to recover any deficiency. Furthermore, nothing in this
subsection shall be construed to prohibit the Borough and the named
insured from 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.
The Borough Council of Lehighton may by resolution adopt procedures
and regulations to implement Act 98 of 1992 and this chapter and may
by resolution fix reasonable fees to be charged for municipal activities
and services provided pursuant to Act 98 of 1992 and this chapter,
including but not limited to issuance of certificates and bills, performance
of inspections and opening separate fund accounts.
Any owner of property, any named insured or any insuring agent
who violates this chapter shall be subject to a penalty of up to $1,000
per violation.
