[HISTORY: Adopted by the Borough Council of the Borough of Lehighton 9-22-2006 by Ord. No. 544-2006. Amendments noted where applicable.]
The Borough Manager of Lehighton Borough 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 (hereinafter the "insurance agent") doing business in the Commonwealth of Pennsylvania shall pay a claim of a named insured for fire damage to a structure located within Lehighton Borough (hereinafter the "Borough") where the amount recoverable for the fire loss to the structure under all policies exceeds $7,500, unless the named insured or insuring agent is furnished by the Municipal Treasurer with a municipal certificate pursuant to § 508(b) of Act 98 of 1992, as amended, and unless there is compliance with § 508(c) and (d) of Act 98 of 1992, as amended, and the provisions of this chapter.
Where, pursuant to § 508(b)(1)(i) of Act 98 of 1992, the Municipal Treasurer issues a certificate indicating that there are no delinquent taxes, assessments, penalties or user charges against real 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 restructure, the following procedures must be followed:
The insuring agent shall transfer from the insurance proceeds to the designated officer of the Borough in the aggregate of $2,000 for each $15,000 of a claim and for a fraction of that amount of a claim, a section to be applied such that if the claim is $15,000 or less, the amount transferred to the Borough shall be $2,000; or
If at the time of a proof of loss agreed to 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, the insuring agent shall transfer to the Borough 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.
After the transfer, the named insured may submit a contractor's signed estimate 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 Borough 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.
Upon receipt of proceeds under this section, the Borough shall do the following:
The designated officer shall place the proceeds in the 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 Borough. 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 any proceedings related thereto.
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 designated officer shall contact the named insured, certify that the proceeds have been received by the Borough and notify the named insured that the procedure under this subsection shall be followed.
When repairs, removal or securing of the building or other structure have been completed in accordance with all applicable regulations and orders of the Borough and the required proof of such completion received by the designated officer and if the Borough has not incurred any costs for repairs, such 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 if excess funds remain, the Borough shall transfer the remaining funds to the named insured.
To the extent that interest is earned on proceeds held by the Borough pursuant to this section 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.
Nothing in this section shall be construed to limit the ability of the Borough to recover any deficiency. Furthermore, 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 disposition of the damaged property has been negotiated.
The Borough Council of Lehighton 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 municipal activities and services provided pursuant to Act 98 of 1992 and this chapter, including but not limited to issuance of certificates and bills, performance of inspections and opening separate fund accounts.
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.