City of Latrobe, PA Fire Insurance Claims

Ordinance No. 1993-4, entitled "Ordinance Adopting Procedures Under Section 508(C) and (D) of the Fire Insurance Company Law of 1921, As Amended," be and the same is hereby repealed in its entirety.

The City Manager, 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 (herein 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 with the City 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 City Manager 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 chapter.[1]

[1]

Editor's Note: See 40 P.S. § 638.

Where, pursuant to Section 508(B)(1)(I) of Act 98 of 1992,[1] as amended, the City Manager issues a certificate indicating that there are no delinquent taxes, assessments, or water, sewer or sanitation user charges, or any interest or penalties thereon related to the damaged subject 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 City 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 City shall be $2,000; or

B.

If at the time of a proof of loss agreed 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 and the estimate is less than $2,000, the insuring agent shall transfer to the City from the insurance proceeds the amount specified in the estimate.

C.

The transfer of proceeds shall be on a pro-rata basis by all companies, associations or exchanges insuring the building or other structure.

D.

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 City in excess of the estimate to the named insured if the City has not commenced to remove, repair, or secure the building or other structure.

E.

Upon receipt of proceeds under this section, the City 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 City. Such costs shall include all reasonable and customary engineering, legal or administrative costs incurred by the City in connection with such removal, repair, or securing of the building or any proceedings related thereto; and

(2)

It is the obligation of the insuring agent when transferring the proceeds to provide the City 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 City and notify the named insured that the proceedings under this subsection shall be followed; and

(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 City and required proof of such completion is received by the designated officer, and if the City has not incurred any costs for repairs, removal or securing, and proof has been submitted to the City that the contractor has been paid, and any taxes, assessments, water, sewer or sanitation or other user charges, or any interest or penalties thereon relating to the damaged subject property have been paid, the fund shall be returned to the named insured. If the City has incurred costs for repairs, removal or securing of the building or other structure, or any taxes, assessments, water, sewer or sanitation or other user charges, or any interest or penalties thereon relating to the damaged subject property have not been paid, the costs shall be paid from the fund. Further, if the contractor has not been paid, the City shall retain such amount until the City is authorized by agreement between the insured and contractor to disburse said funds or is directed by order of court to disburse said funds. If excess funds remain, the City shall transfer the remainder of the funds to the named insured; and

(4)

To the extent that interest is earned on proceeds held by the City pursuant to this section, and not returned to the named insured, such interest shall belong to the City. 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.

(5)

Nothing in this section shall be construed to limit the ability of the City to recover any deficiency. Furthermore, nothing in this subsection shall be construed to prohibit the City and the named insured from entering into an agreement that permits the transfer of funds to the named insured, or an agreed-upon third party, if some other reasonable disposition of the damaged property has been negotiated.

[1]

Editor's Note: See 40 P.S. § 638.

The Council of the City may, by resolution, adopt procedures and regulations to implement Act 98 of 1992, as amended,[1] and this chapter and 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 chapter, including but not limited to, issuance of certificates and bills, performance of inspections and opening separate fund accounts.

[1]

Editor's Note: See 40 P.S. § 638.

Any owner of property, any named insured or any insuring agent who violates this chapter shall be subject to a penalty of up to $1,000 per violation.