[HISTORY: Adopted by the Borough Council of the Borough of
Mount Joy 1-20-1998 by Ord. No. 541 (Ch. 7, Part 2, of the 1992 Code of
Ordinances). Amendments noted where applicable.]
The Commonwealth of Pennsylvania has enacted Act 98 of 1992
and Act 93 of 1994, both amending the Insurance Company Law of 1921,[1] to provide procedures for the payment of certain fire
loss claims. It is the purpose of Act 98 of 1992 and Act 93 of 1994
to deter the commission of arson, to discourage the abandonment of
property and to facilitate payment of taxes and other charges due
to municipalities. The Borough of Mount Joy desires to enact a chapter
pursuant to these Acts to provide for the payment of proceeds from
certain fire loss claims to the Borough.
[1]
Editor's Note: See 40 P.S. § 341 et seq.
This chapter shall be known and may be cited as the "Fire Insurance
Proceeds Ordinance."
In the interpretation of this chapter, the singular shall include
the plural, and the masculine shall include the feminine and the neuter.
All words and phrases shall have the meanings provided herein:
The Insurance Company Law of 1921, Act of May 17, 1921, P.L.
682, as amended by Act 98 of 1992 and Act 93 of 1994, 40 P.S. § 341
et seq.
Mount Joy Borough Authority.
The Borough of Mount Joy, Lancaster County, Pennsylvania.
The person appointed by Borough Council to enforce Borough
ordinances, including, but not limited to:
Any insurance company, association or exchange, as those
terms are defined in the Act, doing business in the Commonwealth of
Pennsylvania.
The appointed Manager of the Borough or his duly appointed
designee.
All delinquent real estate taxes, streetlight taxes, hydrant
taxes, assessments, user charges (including but not limited to water
and sewer rates imposed by the Authority) or any other unpaid costs
or assessments which may become a lien against real property under
the Municipal Claims Law, 53 P.S. § 7101 et seq.
All expenses which the Borough has incurred as costs for
the removal, repair or securing of a building or other structure on
a property.
Any individual, association, partnership, public or private
corporation, whether for profit or not for profit, trust, estate or
other legally recognized entity. Whenever the term "person" is used
in connection with any clause providing for the imposition of a fine
or penalty or the ordering of the action to comply with the terms
of this chapter, the term "person" shall include the members of an
association, partnership or firm and the officers of any public or
private corporation, whether for profit or not for profit.
The appointed Secretary of the Borough or, in the absence
of the Secretary, the appointed Assistant Secretary.
The elected or appointed Tax Collector of the Borough.
The appointed Treasurer of the Borough or, in the absence
of the Treasurer, the appointed Assistant Treasurer.
A.
No insurer 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 of insurance
exceeds $7,500, unless the insurer has complied with Section 508 of
the Act[1] and this chapter.
[1]
Editor's Note: See 40 P.S. § 638.
B.
An insurer which has been presented with a loss report which would
result in an amount recoverable under all policies in excess of $7,500
shall request, in a writing which specifies the address and Lancaster
County Tax Map parcel number of the property, the name and address
of the insurer and the named insured and the date of the receipt of
a loss report from the named insured, a certification from the Borough
under this chapter. The written request for a certification shall
be forwarded to the Manager with a copy to the Tax Collector.
C.
Within 14 working days after receipt of a written request from an
insurer for a certification under this chapter, the Manager shall
consult with the Treasurer, Tax Collector and the Authority and thereafter
shall certify, in writing or by verbal notification to the insurer,
either that there are no unpaid municipal claims or municipal expenses
against the property or that there are either municipal claims or
municipal expenses, specifying the nature and amount of such claims
or expenses, accompanied by a bill for such amounts. If the Manager
makes a verbal certification, the insurer shall confirm the certification
in writing.
D.
Where the Manager has issued a certificate stating that there are no unpaid municipal claims or municipal expenses, the insurer may pay the claim of the named insured subject to Subsection F below.
E.
Where the Manager has issued a certificate identifying municipal
claims or municipal expenses, the insurer shall transfer to the Borough
an amount from the insurance proceeds necessary to pay the municipal
claims and/or municipal expenses. The Manager shall ensure that the
payment received from the insurer is properly credited.
F.
When all municipal claims and municipal expenses identified pursuant to this section have been paid, or where the Treasurer has issued a certificate described in Subsection C 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 shall be followed:
(1)
The insurer shall transfer from the insurance proceeds to the Borough,
in the aggregate, $2,000 for each $15,000 of such claim or fraction
thereof. If, at the time a loss report is submitted by the insured,
such insured has submitted to the insurer, with a copy to the Borough,
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 transfer formula, the insurer
shall transfer to the Borough 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.
(2)
Upon receipt of the above-described portion of the insurance proceeds,
the Manager shall:
(a)
Place the proceeds in a separate fund to be used solely as security
against the total municipal expenses anticipated by the Borough to
be required in removing, repairing or securing the building or 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 or any proceedings related thereto.
(b)
Mail to the named insured, at the address received from the
insurer, a notice that the proceeds have been received by the Borough
and that the procedures under this subsection shall be followed.
(3)
After the transfer, the named insured may submit to the Borough a
contractor's signed estimate of the costs of removing, repairing
or securing the building or other structure, in which event the Manager
shall, if such estimate is deemed by the Manager to be reasonable,
return to the insured the amount of the funds transferred to the Borough
in excess of that required to pay the municipal expenses, provided
the Borough has not commenced to remove, repair or secure the building
or other structure, in which case the Borough will complete the work.
(4)
Upon completion of the repair, removal or securing of the structure,
the Manager shall transfer for reimbursement to the Borough general
fund the amount of the municipal expenses paid by the Borough. If
funds remain after such reimbursement, the Manager shall pay the remaining
balance in the fund (without interest) to the named insured upon receipt
of a certificate issued by the Code Official that the repair, removal
or securing of the building or other structure has been completed
in accordance with all applicable Borough ordinances. The Borough
shall retain interest earned upon the fund as reimbursement for its
administrative expenses in overseeing the fund.
G.
Nothing in this section shall be construed to limit the ability of
the Borough to recover any deficiency in the amount of municipal claims
or municipal expenses recovered pursuant to this chapter or to insurance
proceeds by an action at law or equity to enforce the codes of the
Borough or to enter into an agreement with the named insured with
regard to such other disposition of the proceeds as the Borough may
deem reasonable.
Any owner of property, named insured, insurer or other person
who violates the provisions of this chapter or who shall fail to comply
with any of the requirements hereof shall be liable, upon summary
conviction, to fines and penalties not exceeding $600, which fines
and penalties may be collected by suit or summary proceeding brought
in the name of the Borough before a Magisterial District Judge or
recovered as debts of the like amount are now by law recoverable.
The Secretary of the Borough shall transmit a certified copy
of this chapter promptly to the Department of Community and Economic
Development of the Commonwealth of Pennsylvania.
