[Adopted 12-5-2006 by Ord. No. 231-2006]
No insurance company, association or exchange (hereinafter the "insurer")
doing business in the Commonwealth of Pennsylvania shall pay a claim of a
named insured for fire damage to a structure located within the Township where
the amount recoverable for the fire loss to the structure under all policies
exceeds $7,500 unless the insurer is furnished by the Township's Treasurer
with a certificate pursuant to § 508(b) of the Act and unless there
is compliance with the procedure set forth in § 508(c) and (d) of
the Act. [Note: The Insurance Company Law of 1921, as amended by Act 98 of
1992 and Act 93 of 1994. See 40 P.S. § 638.]
When all municipal claims and municipal expenses have been paid pursuant to §
106-2, or where the Treasurer has issued a certificate described in § 106-2B(l) indicating that there are no municipal claims or municipal expenses against the property, the insurer shall pay the claim of the named insured; provided, however, that if the loss agreed upon by the named insured and the insurer 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 insurer shall transfer, from the insurance proceeds
to the Township Treasurer, in the aggregate, $2,000 for each $15,000 of such
claim or fraction thereof.
B. If at the time a loss report is submitted by the insured
such insured has submitted to the insurer, with a copy to the Township, a
contractor's signed estimate of the costs of removing, repairing or securing
the building or other structure in an amount less than the amount calculated
under the foregoing formula, the insurer shall transfer to the Township Treasurer,
from the insurance proceeds, the amount specified in the estimate. If there
is more than one insurer, the transfer of proceeds shall be on a pro rata
basis by all insurers insuring the building or other structure.
C. Upon receipt of the above-described portion of the insurance
proceeds, the Township Treasurer shall do the following:
(1) Place the proceeds in a separate fund to be used solely
as security against the total municipal expenses anticipated by the Township
to be required in removing, repairing or securing the building or structure.
Such costs shall include, without limitation, all engineering, legal or administrative
costs incurred by the Township in connection with such removal, repair or
securing or any proceedings related thereto.
(2) Mail to the named insured, at the address received from
the insurer, a notice that the proceeds have been received by the Township
and that the procedures enacted herein shall be followed.
(3) After the transfer of the proceeds into the separate
fund, the named insured may submit to the Township a contractor's signed
estimate of the costs of removing, repairing or securing the building or other
structure, in which event the Township Treasurer shall, if such estimate is
deemed by the Treasurer to be reasonable, return to the insured the amount
of the funds transferred to the Township in excess of that required to pay
the municipal expenses already incurred, provided that the Township has not
commenced to remove, repair or secure the building or other structure, in
which case the Township will complete the work and deduct the municipal expenses
incurred from such separate fund.
(4) Pay to the Township Manager, for reimbursement to the
Township general fund, the amount of the municipal expenses paid by the Township.
(5) Pay the remaining balance in the separate fund (without
interest) to the named insured upon receipt of a certificate issued by the
Code Enforcement Officer of the Township (or other applicable official of
the Township) that the repair, removal or securing of the building or other
structure has been completed in accordance with all applicable ordinances,
codes and regulations of the Township.
D. Nothing in this article shall be construed to limit the
ability of the Township to recover any deficiency in the amount of municipal
claims or municipal expenses recoverable pursuant to this article or recoverable
under any other state law, or other ordinance, or to insurance proceeds, by
an action at law or equity to enforce the ordinances, codes and regulations
of the Township or to enter into an agreement with the named insured with
regard to such other disposition of the proceeds as the Township may deem
reasonable.
Any owner of property, any named insured or insurer who violates the
provisions of this article or who shall fail to comply with any of the requirements
hereof shall be liable, upon summary conviction, to a fine and penalty of
not less than $100 nor more than $1,000, which fine and penalty may be collected
by suit or summary proceeding.