[Adopted 10-15-1997 by Ord. No. 843]
The Borough Secretary, 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 "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 Borough
of Baden (hereinafter, "municipality") where the amount recoverable for the
fire loss to the structure under all policies exceeds $7,500, unless the insuring
agent is furnished by the Municipal Treasurer with a municipal certificate
pursuant to Section 508(B) of Act 98 of 1992, as amended, and unless there is compliance with Section 508(C) of Act 98 of
1992, as amended, and the provisions of this article.
Where, pursuant to Section 508(B)(1)(I) of Act 98 of 1992, as amended,
the Municipal Treasurer issues a certificate indicating that there are not
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 or structure, the following procedures must be followed:
A. The insuring agent shall transfer from the insurance
proceeds to the designated officer of the municipality in the aggregate of
$2,000 for each $15,000 of a claim and for each fraction of that amount of
a claim, this section to be applied such that if the claim is $15,000 or less,
the amount transferred to the municipality shall be $2,000; 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 municipality from the insurance proceeds
the amount specified in the estimate.
B. The transfer of proceeds shall be on pro rata basis by
all companies, associations or exchanges insuring the building or other structure.
C. After the transfer, the named insured shall submit a
contractor's signed estimate within 60 days 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 municipality
in excess of the estimate to the named insured, if the municipality has not
commenced to remove, repair or secure the building or other structure.
D. Upon receipt of proceeds under this section, the municipality
shall do the following:
(1) The designated officer shall place the proceeds in a
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
municipality. Such costs shall include all reasonable and customary engineering,
legal or administrative costs incurred by the municipality 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 municipality with the name and address of the
named insured. Upon receipt of the transferred funds and the name and address
of the named insured, certify that the proceeds have been received by the
municipality and notify the named insured that the procedures 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 municipality and the required proof of such completion received
by the designated officer, and if the municipality has not incurred any costs
for repairs, removal or securing, the fund shall be returned to the named
insured. If the municipality 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 municipality shall transfer the remaining
funds to the named insured.
(4) To the extent that interest is earned on proceeds held
by the municipality pursuant to this section and not returned to the named
insured, such interest shall belong to the municipality. 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.
E. Nothing in this section shall be construed to limit the
ability of the municipality to recover any deficiency. Furthermore, nothing
in this subsection shall be construed to prohibit the municipality 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 Council of the Borough of Baden may by resolution adopt procedures
and regulations to implement Act 98 of 1992, as amended, and this article may by resolution fix reasonable fees to be charged
for municipal activities or services provided pursuant to Act 98 of 1992,
as amended, and this article, 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 article shall be subject to a penalty of up to $1,000
per violation.