[HISTORY: Adopted by the Board of Supervisors of the Township of Westtown as indicated in article histories. Amendments noted where applicable.]
[Adopted 5-1-2017 by Ord. No. 2017-1]
No insurance company, association or exchange (hereinafter "insuring agent") doing business in the Commonwealth of Pennsylvania shall pay a claim of a named insured for fire damage to a structure located within the Township 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 Township Treasurer with a municipal certificate pursuant to Section 508(b) of Act 98 of 1992 as amended, 40 P.S. § 638(b), and unless there is compliance with Section 508(c) of Act 98 of 1992 as amended, 40 P.S. § 638(c) and the provisions of this article.
The Township Treasurer or Assistant Treasurer shall, within 14 business days of the written request of the named insured and receipt of a certification fee established by resolution of the Board from time to time, provide a fire loss certificate to the insuring agent specifying:
The tax description and physical address of the property;
The name and address of the insuring agent;
The date agreed upon by the insuring agent and the named insured as the date of the receipt of a loss report of the claim; and
The amount of any delinquent taxes, assessments, penalties or user charges against the property and the amount of any costs incurred by the Township for the removal, repair or securing of a building or other structure on the property.
A tax, assessment, penalty or user charge becomes delinquent at the time and on the date a lien could otherwise have been filed against the property by the Township under applicable law or ordinance.
Upon receipt of a fire loss certificate showing any costs owed, the insuring agent shall return the bill to the Township Treasurer and transfer to the Township an amount from the insurance proceeds necessary to pay the taxes, assessments, penalties, charges and costs shown on the fire loss certificate. The Township shall receive the amount and credit it to payment of the items shown in the fire loss certificate.
No insuring agent doing business in the Commonwealth of Pennsylvania shall pay a claim of a named insured for fire damage to a structure located within Westtown Township under the terms of Section 508(a) of the Insurance Company Law of 1921, as amended, 40 P.S. § 638(a), unless the insuring agent is furnished with a certificate pursuant to § 99-2A of this article and unless there is compliance with the procedures set forth in § 99-2B and § 99-3 of this article.
Where the loss agreed to between the named insured and the insuring agent is less than 60% of the aggregate limits of liability on all fire policies covering the building or other structure, the insuring agent shall pay the claim of the named insured in accordance with the policy terms.
Where 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:
The insuring agent shall transfer funds from the insurance proceeds to the designated officer of the Township 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 Township 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 Township from the insurance proceeds the amount specified in the estimate.
The transfer of proceeds shall be on pro rata basis by all companies, associations or exchanges insuring the building or other structure.
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 Township in excess of the estimate to the named insured, if the Township has not commenced to remove, repair or secure the building or other structure.
Upon receipt of proceeds under this section, the Township shall do the following:
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 Township. Such costs shall include all reasonable and customary engineering, legal or administrative costs incurred by the Township in connection with such removal, repair, or securing of the building or any proceedings related thereto; and
It is the obligation of the insuring agent when transferring the proceeds to provide the Township with the name and address of the named insured. Upon receipt of the transferred funds and the name and address of the name insured, certify that the proceeds have been received by the Township and notify the named insured that the procedures under this subsection shall be followed; and
When repairs, removal or securing of the building or other structure have been completed in accordance with all applicable regulations and orders of the Township and the required proof of such completion received by the designated officer:
If the Township has not incurred any costs for repairs, removal or securing, including all administrative, personnel, overhead, engineering and legal costs, the funds shall be returned to the named insured.
If the Township has incurred costs for repairs, removal or securing of the building or other structure, including all administrative, personnel, overhead, engineering and legal costs, the costs shall be paid from the fund and if excess funds remain, the Township shall transfer the remaining funds to the named insured.
Nothing in this section shall be construed to limit the ability of the Township to recover any deficiency. Furthermore, nothing in this subsection shall be construed to prohibit the Township 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.
Upon the enactment of this article, the Township Secretary shall file an exact copy of the article with the Department of Community Affairs together with the name, position and phone number of the municipal official responsible for compliance with Section 508 of the Insurance Company Law of 1921, as amended, 40 P.S. § 638.
Any owner of property, any named insured or any insuring agent who shall be convicted of a violation of any provision of this article or rule and/or regulation issued pursuant to this article before any District Justice shall be sentenced to pay a fine of not more than $1,000 per violation, together with attorneys' fees and the costs of prosecution, and/or sentenced to a period of imprisonment in the county jail for a term not to exceed 30 days.