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Borough of Sewickley, PA
Allegheny County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Borough Council of the Borough of Sewickley as indicated in article histories. Amendments noted where applicable.]
[Adopted 12-20-2010 by Ord. No. 1289]
This article shall be known and may be cited as the "Sewickley Borough Fire Insurance Escrow Ordinance."
A. 
No insurance company, association or exchange (hereinafter "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 of Sewickley (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 Manager, the Borough Real Estate Tax Collector, or such other Borough official as may be designated by the Borough Council (hereinafter "Borough officer") with a certificate (the "certificate") pursuant to Section 508(b) of the Insurance Company Law of 1921, as amended by Act 98 of 1992 and Act 93 of 1994 (collectively, the "Act"), and unless there is compliance with the procedures set forth in Section 508(c) and (d) of the Act.[1]
[1]
Editor's Note: See 40 P.S. § 638.
B. 
Delinquent municipal claims and expenses.
(1) 
In the event there are delinquent taxes, assessments, penalties or other charges (collectively, "municipal claims") against the property on which the fire loss was suffered (the "property"), or there are expenses incurred by the Borough for costs of removal, repair or securing of any structure on the property (collectively, "municipal expenses"), the Borough officer shall immediately render a bill for such municipal claims and municipal expenses, if not already done. For purposes of this article, taxes, assessments, penalties and other charges shall be deemed delinquent as of the date a lien could have been filed against the property for such claims under applicable law.
(2) 
Upon receipt of a written request from the named insured specifying the description of the property, the name and address of the insurer, and the date of receipt by the insurer of a loss report of the claim, the Borough officer shall furnish to the insurer, within 14 days after receipt of such request, a certificate, either:
(a) 
Stating that there are no unpaid municipal claims or municipal expenses against the property; or
(b) 
Specifying the nature and amount of any unpaid municipal claims or municipal expenses against the property, and accompanied by a bill for such amounts.
(3) 
Subject to the provisions of Subsection C below, upon receipt of a certificate pursuant to Subsection B(2)(a) above, the insurer shall pay the claim of the named insured in accordance with the applicable policy terms. Upon receipt of a certificate and a bill pursuant to Subsection B(2)(b) above, the insurer shall transfer to the Borough officer from the applicable insurance proceeds an amount sufficient to pay said bill prior to making payment to the named insured.
C. 
Notwithstanding the provisions of Subsection B(3) above, 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 damaged structure, the following procedures shall be followed:
(1) 
The insurer shall transfer from the insurance proceeds to the Borough officer, in the aggregate, $2,000 for each $15,000 of such claim or fraction thereof.
(2) 
If, in addition to the loss report submitted by the named insured to the insurer, the named insured has submitted to the insurer a contractor's signed estimate of the costs of removing, repairing or securing the structure in an amount less than the amount calculated under the transfer formula set forth in Subsection C(1) above, the insurer shall transfer from the insurance proceeds only the amount specified in such estimate.
(3) 
If more than one insurer has insured the damaged structure, the transfer of proceeds described in this Subsection C shall be on a pro rata basis by all such insurers.
(4) 
Upon receipt of the portion of insurance proceeds described in Subsection C(1) or (2) above, the Borough officer shall take the following actions:
(a) 
Place said proceeds in a separate fund to be used solely as security against the total municipal expenses anticipated by the Borough for the removal, repair or securing of the damaged structure, including without limitation any engineering, legal or administrative costs incurred by the Borough in connection therewith or proceedings related thereto.
(b) 
Mail to the named insured at the address provided by the insurer a notice that the proceeds have been received by the Borough and that the procedures outlined in this article shall be followed.
(c) 
If the named insured submits to the Borough a contractor's signed estimate of the costs of removing, repairing or securing the structure in an amount less than said proceeds, return to the named insured the amount of such proceeds in excess of the amount required to pay municipal expenses, provided that the Borough officer, in consultation with the Borough Engineer, deems such estimate to be reasonable; and provided, further, that the Borough has not commenced the removal, repair or securing of the structure, in which case the Borough shall complete such work.
(d) 
Reimburse the Borough's general fund the amount of the municipal expenses paid by the Borough.
(e) 
Transfer the remaining balance of such proceeds without interest to the named insured after certifying that the removal, repair or securing of the structure has been completed in accordance with all applicable Borough ordinances and regulations.
D. 
Nothing in this § 206-2 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 article by an action at law or in equity, or to otherwise enforce Borough ordinances or regulations, or to enter into an agreement with the named insured with regard to the disposition of the damaged structure and the related insurance proceeds.
Nothing in this article shall be construed to render an insurer liable for any amount in excess of proceeds payable under applicable insurance policies or for any other act performed pursuant to this article or to make the Borough or any public official of the Borough an insured under a policy of insurance or to create an obligation to pay municipal claims or municipal expenses other than as provided by this article.
An insurer making payment of policy proceeds under this article for municipal claims or municipal expenses incurred by the Borough shall have the full benefit of such payments, including all rights of subrogation and of assignment.
This article shall be liberally constructed to accomplish its purpose to deter the commission of arson and related crimes, to discourage the abandonment of property, and to prevent blight and deterioration.
Promptly upon enactment, the Borough officer shall transmit a certified copy of this article to the Pennsylvania Department of Community and Economic Development (DCED).
Any owner of property, any named insured, and any insurer who violates the provisions of this article or who shall fail to comply with any of the requirements hereof, upon summary conviction thereof before a Magisterial District Judge, shall be sentenced to pay a fine of not greater than $1,000 plus costs (including reasonable attorneys' fees and expenses) and, in default of payment of said fines and costs, to a term of imprisonment not to exceed 30 days. Each day on which an offense continues shall be deemed a separate offense.