[HISTORY: Adopted by the Borough Council of the Borough of
Auburn 5-6-1998 by Ord. No. 1998-5-1. Amendments noted where applicable.]
No insurance company, association or exchange shall pay a claim of a named insured for fire damage to a structure located within the Borough of Auburn where the amount recoverable for the fire loss to the structure under all policies exceeds $7,500, unless the insurance company, association or exchange has been furnished with a certificate pursuant to § 161-2 of this chapter and unless there is compliance with the procedures set forth in §§ 161-3 and 161-4 of this chapter.
A.
The Borough of Auburn Treasurer shall, upon the written request of
the named insured specifying the tax description of the property,
name and address of the insurance company, association or exchange
and the date agreed upon by the insurance company, association or
exchange and the named insured as the date of the receipt of a loss
report of the claim, furnish the insurance company, association or
exchange either of the following within 14 working days of the request:
(1)
A certificate or, at the discretion of the Auburn Borough Treasurer,
a verbal notification which shall be confirmed in writing by the insurer
to the effect that, as of the date specified in the request, there
are no delinquent taxes, assessments, penalties or user charges against
the property and that, as of the date of the Treasurer's certificate
or verbal notification, Auburn Borough has not certified any amount
as total costs incurred by the Borough for the removal, repair, or
securing of the building or other structure on the property; or
(2)
A certificate and bill showing the amount of delinquent taxes, assessments,
penalties and user charges against the property as of the date specified
in the request that have not been paid as of the date of this certificate
and also showing, as of the date of the Treasurer's certificate,
the amount of the total cost, if any, certified to the Treasurer that
have been incurred by Auburn Borough for the removal, repair or securing
of a building or other structure on the property. For purposes of
this subsection, the Borough shall certify the total amount, if any,
of such costs. A tax, assessment, penalty or user charge becomes delinquent
at the time and on the date a lien could otherwise have been filed
against the property by the Borough under the applicable law.
B.
Receipt of certificate.
(1)
Upon the receipt of a certificate pursuant to § 161-2A(1) of this chapter, the insurance company, association or exchange shall pay the claim of the named insured in accordance with the policy terms, unless the loss agreed to between the named insured and the company, association or exchange equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building or other structure. In the case of such a loss, the insurance company, association or exchange, the insured property owner and the Borough shall follow the procedures set forth in §§ 161-3 and 161-4 of this chapter.
(2)
Upon receipt of a certificate and bill pursuant to § 161-2A(2) of this chapter, the insurance company, association, or exchange shall return the bill to the Treasurer and transfer to the Treasurer an amount from the insurance proceeds necessary to pay the taxes, assessments, penalties, charges and costs as shown on the bill. The Borough shall receive the amount and apply or credit it to payment of the items shown in the bill.
When the loss agreed to between the named insured and the company,
association or exchange equals or exceeds 60% of the aggregate limits
of liability on all fire policies covering the building or other structure,
the insurance company, association or exchange shall transfer from
the insurance proceeds to the Borough Treasurer in the aggregate amount
of $2,000 for each $15,000 and each fraction of that amount of a claim,
or, if at the time of a loss report the named insured has submitted
a contractor's signed estimate of the costs of removing, repairing
or securing the building or other structure in the amount less than
the amount calculated under the foregoing transfer formula, the insurance
company, association or exchange shall transfer 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 other structure. Policy proceeds remaining
after the transfer to the Borough shall be disbursed in accordance
with the policy terms. The named insured may submit a contractor's
signed estimate of the cost of removing, repairing or securing the
building or other structure after the transfer and the Borough Treasurer
shall return the amount of the fund 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. The Borough Treasurer being
the designated officer pursuant to this paragraph to carry out the
duties of this chapter.
Upon receipt of the proceeds by the Borough, the Borough Treasurer shall place the proceeds in a separate fund to be used solely as security against the total cost of removing, repairing or securing the building as might be incurred by the Borough. When transferring the funds as required in § 161-3 of this chapter, an insurance company, association or exchange shall provide the municipality with the name and address of the named insured, whereupon the Borough shall contact the named insured, certify that the proceeds have been received by the Borough and notify the named insured that the procedures under this section shall be followed. The fund shall be returned to the named insured when repairs, removal or securing of the building or other structure have been completed and the required proof received by the Borough Treasurer if the Borough has not incurred any costs for repairs, removal or securing. 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. Nothing in this section shall be construed to limit the ability of the Borough to recover any deficiency. Further, nothing in this section 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.
Proof of payment by the insurance company, association or exchange of proceeds under a policy in accordance with § 161-3 of this chapter is conclusive evidence of the discharge of its obligation to the insured under the policy to the extent of the payment and of compliance by the company, association or exchange with § 161-3 of this chapter.
Nothing in this chapter shall be construed to make an insurance
company, association or exchange liable for any amount in excess of
proceeds payable under its insurance policy or for any other act performed
pursuant to this chapter or to make the Borough or Borough Treasurer
an insured under a policy of insurance or to create an obligation
to pay delinquent property taxes or unpaid removal liens or expenses
other than as provided in this chapter.
An insurance company, association or exchange making payments
of policy proceeds under this chapter for delinquent taxes or structure
removal liens or removal expenses incurred by the Borough shall have
a full benefit of such payment, including all rights of subrogation
and of assignment.
An exact copy of this chapter shall be filed with the Pennsylvania
Department of Community and Economic Affairs along with the name and
phone number of the Borough Treasurer.
An owner of property, any named insured or any insuring agent
who violates this chapter shall, upon conviction in a summary proceeding
under the Pennsylvania Rules of Criminal Procedure, be guilty of a
summary offense and shall be punishable by a fine of not more than
$1,000, plus court costs and reasonable attorneys’ fees incurred
by the Borough in the enforcement proceedings. Upon judgment against
any person by summary conviction, or by proceedings by summons on
default of the payment of the fine or penalty imposed and the costs,
the defendant may be sentenced and committed to the county correctional
facility for a period not exceeding 30 days. Each day that such violation
exists shall constitute a separate offense, and each section of this
chapter that is violated shall also constitute a separate offense.
In addition to or in lieu of enforcement under this section, the Borough
may enforce this chapter in equity in the Court of Common Pleas of
Schuylkill County.
