[HISTORY: Adopted by the Borough Council of the Borough of Muncy as indicated in article histories. Amendments noted where applicable.]
[Adopted 4-3-2007 by Ord. No. 490]
As used in this article, the following terms shall have the meaning indicated:
- FIRE LOSS or CLAIM FOR FIRE DAMAGE
- Any loss occurring after the effective date of this article and covered under a policy of fire insurance, including any endorsements or riders to such policy.
The Borough Secretary-Treasurer, or such other official designated by the Borough Council, is hereby appointed as the designated officer who is authorized to carry out all responsibilities and duties of the Borough stated herein.
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 Borough where the amount recoverable for the fire loss to the structure under all policies exceeds $7,500, unless the insurer is furnished by the Borough Secretary-Treasurer with a Borough certificate pursuant to Section 508(b) of Act 98 of 1992 and unless there is compliance with Sections 508(c) and (d) of Act 98 of 1992 and the provisions of this article and the ordinance for payment of delinquent taxes from fire insurance proceeds and the delinquent tax ordinance.
Editor's Note: See 40 P.S. § 638(b).
After full compliance with the requirements of Section 508(b)(1)(i) of Act 98 of 1992, the insurer shall pay the claim of the named insured; provided, however, that if the loss is 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 structure, the following procedures shall be followed:
The insurer shall transfer from the insurance proceeds to the Borough Secretary-Treasurer the aggregate of $2,000 for each $15,000 of a claim and for each fraction of the amount of a claim, provided:
That this section is to be applied such that if the claim is $15,000 or less, the amount transferred to the Borough shall be $2,000; and
That, if at that time of a loss report the named insured has submitted 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 based upon 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. Policy proceeds remaining after the transfer to the Borough shall be disbursed in accordance with the policy terms.
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 Borough Secretary-Treasurer 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 insurer 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 names and addresses of the named insured, the Borough Secretary-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;
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 Secretary-Treasurer, the Borough has not incurred any costs for repairs, removal or securing, the fund shall be returned to the named insured. If the Borough 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; and
To the extent that interest is earned on proceeds held by the Borough pursuant to this section, and retained by it, 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 article 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 will adopt procedures and regulations to implement Section 508 of Act 98 of 1992 and this article and may by resolution fix reasonable fees to be charged for Borough activities or services provided to Section 508 of Act 98 of 1992 and this article; including but not limited to issuance of certificates and bills, performance of inspections and opening separate fund accounts.
Editor's Note: See 40 P.S. § 638.
Any owner of property, any named insured or any insurer who violates this article shall be subject to a penalty of not more than $1,000 per violation, together with the costs of prosecution, and in default of payment of such fine and costs, to imprisonment for not more than 30 days. Every day's violation shall be deemed to be a separate offense.