Borough of West Chester, PA
Chester County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Council of the Borough of West Chester 11-18-1992 as Ord. No. 19-1992. Amendments noted where applicable.]
This chapter shall be known as the "Borough of West Chester Fire Insurance Escrow Ordinance."
For the purposes of this chapter, the following terms shall have the meanings indicated:
ASSOCIATION
Only individuals, partnerships or associations of individuals authorized to engage in the business of insurance in the Commonwealth of Pennsylvania as insurers on the Lloyd's Plan.
BASIC PROPERTY INSURANCE
Includes all policies that provide insurance against direct loss to real property or tangible personal property at a fixed location caused by perils defined and limited in the standard fire policy prescribed and set forth in Section 506 of the Insurance Company Law of 1921, and in the Extended Coverage Section Endorsement approved by the Insurance Commissioner pursuant to Section 354 of the Insurance Company Law of 1921[1] and such vandalism, malicious mischief, burglary, theft or other such classes of insurance as may be determined by the Insurance Commissioner, but shall not include insurance on motor vehicle, farm or such manufacturing risks as may be excluded by the Insurance Commissioner.
BOROUGH
The Borough of West Chester.
BOROUGH MANAGER
The Borough Manager of the Borough of West Chester and/or his or her duly appointed assistants.
COMPANY
Includes incorporated insurance companies only and title insurance companies, whether incorporated under the laws of the Commonwealth of Pennsylvania or any other state, territory or district or under the laws of any foreign country.
EXCHANGE
Includes only individuals, partnerships and corporations authorized by the laws of the Commonwealth of Pennsylvania to exchange with each other inter-insurance or reciprocal insurance contracts.
FIRE LOSS or CLAIM FOR FIRE DAMAGE
Includes any loss covered under a policy of fire insurance, including any endorsements or riders to the policy.
[Added 5-10-1995 by Ord. No. 7-1995]
INSURANCE COMMISSIONER
The Insurance Commissioner of the Commonwealth of Pennsylvania and/or his duly appointed assistants.
PERSON
Any natural person, partnership, firm, association or corporation.
TREASURER
The Treasurer of the Borough of West Chester and/or his or her duly appointed assistants.
[1]
The Insurance Company Law 40 P.S. § 362 et seq.
A. 
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 building or other structure located within the borough where the amount recoverable for the fire loss to the building or other structure under all policies exceeds seven thousand five hundred dollars ($7,500.) unless the insuring agent is first furnished with a municipal certificate in accordance with § 58-3B and unless there is compliance with procedures set forth in § 58-3C.
[Amended 5-10-1995 by Ord. No. 7-1995]
B. 
Certificates.
[Amended 5-10-1995 by Ord. No. 7-1995]
(1) 
The Treasurer shall, upon the written request of the named insured, which written request shall specify the tax parcel number of the subject real property and the date agreed upon by the insuring agent and the named insured as the date of the receipt of a proof of loss of the claim, provide the named insured with either of the following certificates within fourteen (14) working days, which certificate shall then be supplied by the named insured to the insuring agent:
(a) 
A certificate, or at the discretion of the borough, a verbal notification which shall be confirmed in writing by the insuring agent 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 certificate or verbal notification, the borough has not certified any amount as total costs incurred by the borough for the removal, repair or securing of a building or other structure on the property; or
(b) 
A certificate and bill showing the amount of delinquent taxes, assessments, penalties and user charges against the subject real 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 Treasurer's certificate, the amount of the total costs, if any, certified to the Treasurer by the Borough Manager, that have been incurred by the borough or known by the borough for the removal, repair or securing of a building or other structure on the subject real property.
(2) 
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 applicable law.
C. 
When, pursuant to § 58-3B(1), the Treasurer issues a certificate indicating that there are no delinquent taxes, assessments, penalties, user charges or costs incurred by the borough of the removal, repair or securing of a building or other structure on the subject 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 other structure, the following procedures must be followed:
(1) 
The insuring agent shall transfer from the insurance proceeds to the Treasurer an amount of two thousand dollars ($2,000.) for each fifteen thousand dollars ($15,000.) of a claim and for each fraction of that amount of a claim. This section is to be applied such that if the claim is fifteen thousand dollars ($15,000.) or less, the amount transferred to the borough shall be two thousand dollars ($2,000.).
[Amended 5-10-1995 by Ord. No. 7-1995]
(2) 
If at the time of a proof of loss agreed to between the named insured and the insuring agent the named insured has submitted an estimate of the cost of removing, repairing or securing the building or other structure which has been prepared by and signed by a bona fide contractor, the insuring agent shall transfer to the borough from the insurance proceeds the amount specified in the estimate.
(3) 
The transfer of proceeds shall be on a pro rata basis by all insuring agents insuring the building or other structure.
(4) 
After the transfer, the named insured may submit an estimate of the costs of removing, repairing or securing the building or other structure, which has been prepared by and signed by a bona fide contractor, and if the borough has not commenced to remove, repair or secure the building or other structure, the Treasurer shall return the amount of funds transferred to the borough in excess of the estimate to the named insured.
(5) 
Upon receipt of the proceeds under this chapter, the borough shall do the following:
(a) 
The Treasurer shall place the proceeds in a separate fund to be used solely as security against the total costs which are incurred by the borough to remove, repair or secure a building or other structure. 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 other structure or any other proceedings related thereto.
(b) 
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 Treasurer 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 subsection shall be followed.
(c) 
When repairs, removal or securing of the building or other structures have been completed in accordance with all applicable regulations and orders of the borough and the required proof of such completion is received by the Treasurer, and provided that the borough has not incurred any costs for repairs, 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 the balance, if any, shall be transferred to the named insured.
(d) 
To the extent that interest is earned on the proceeds held by the borough pursuant to this chapter 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.
D. 
Upon receipt of a certificate and bill pursuant to § 58-3B(2), the insuring agent 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. Upon receipt of the amount, the borough shall apply or credit such amount to the payment of the items as shown on the bill.
E. 
Nothing in this chapter shall be construed to limit the liability of the borough to recover any deficiencies. Furthermore, nothing in this chapter shall be construed to prohibit the borough and the named insured from entering into an agreement to permit the transfer of funds transferred to the borough in excess of the estimate to the named insured.
The borough 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 the borough's activities or services provided pursuant to Act 98 of 1992 and this chapter, including but not limited to the issuance of certificates and bills, performance of inspections and opening separate fund accounts.
Any person, owner of property, named insured or insuring agent who shall be convicted of a violation of any provision of this chapter or rule and/or regulation issued pursuant to this chapter before any District Justice shall be sentenced to pay a fine of not more than one thousand dollars ($1,000.) per violation, together with the costs of prosecution, and/or to imprisonment in the county jail for a term not to exceed thirty (30) days.