Borough of Sharpsburg, PA Part 5 Payment of Certain Fire Loss Claims

[Adopted 7-12-1993 by Ord. No. 508]

§ 7-501 Definitions.

As used in this part, "municipality" shall mean the Borough of Sharpsburg.

§ 7-502 Purpose.

This part is designed to deter the commission of arson and related crimes, to discourage the abandonment of property, to prevent urban blight and deterioration and as a means of collecting delinquent taxes, assessments, penalties, user charges and costs which exist against the property incurring a fire loss pursuant to this part.

§ 7-503 Borough certificate required prior to payment of fire loss claims.

1. No insurance company, association or exchange doing business in this commonwealth 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 $5,000, unless the insurance company, association or exchange is furnished with a certificate pursuant to Subsection 2 of this section and unless there is compliance with the procedures set forth in Subsections 3 and 4 of this section.

2. The Borough Secretary shall, upon the written request of the named insured specifying the tax description of the property and the date agreed upon by the insurance company, association or exchange and the named insured as the date of the receipt of a proof of loss of the claim, furnish the named insured either of the following, which shall then be supplied by the named insured to the company, association or exchange:

A. A certificate 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 owner owed to the Borough or costs incurred by the Borough for the removal, repair or securing of a building or other structure on the property as of the date of the Borough Secretary's certificate.

B. 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 the certificate and also showing, as of the date of the Borough Secretary's certificate, the amount of the total costs, if any, certified to the Borough Secretary that have been incurred by the Borough for the removal, repair or securing of a building or other structure on the property. For the purposes of this subsection, the Borough shall certify to the Borough Secretary the total amount, if any, of such costs.

3. Upon the receipt of a certificate pursuant to Subsection 2A of this section, 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 Subsections 4 and 5 of this section. Upon the receipt of a certificate and bill pursuant to Subsection 2B of this section, the insurance company, association or exchange shall return the bill to the Borough Secretary and transfer to the Borough Secretary 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.

4. 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 Secretary of the Borough in the aggregate $1,000 for each $20,000 and each fraction of that amount of a claim or, if at the time of a proof of loss agreed to between the named insured and the insurance company, association or exchange the named insured has submitted a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure, 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 costs of removing, repairing or securing the building or other structure after the transfer and the Borough Secretary 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.

5. Upon receipt of proceeds by the Borough as authorized by this section the Borough Secretary shall place the proceeds in a separate fund to be used solely as security against the total cost of removing, repairing or securing incurred by the Borough. When transferring the funds as required in Subsection 4 of this section an insurance company, association or exchange shall provide the Borough 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 name insured that the procedures under this subsection 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 Secretary 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 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 deposition of the damaged property has been negotiated.

6. Nothing in this section 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 section or to make a Borough or public official 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 section.