[HISTORY: Adopted by the Board of Supervisors of the Township
of Lower Makefield 12-6-2023 by Ord. No. 443. Amendments noted where
applicable.]
The title of this chapter shall be known as the "Lower Makefield
Township Fire Insurance Escrow Ordinance."
The purpose of this chapter is to provide financial security
for recovery of Township claims for delinquent taxes, assessments,
municipal liens, service fees and costs of removal or security of
a building damaged by fire from fire insurance proceeds payable as
a result of a fire loss to a building or premises; to deter the commission
of arson and related crimes; and to discourage abandonment of fire-damaged
property to prevent blight.
The Township Finance Director, Assistant Finance Director, such
official's designee or such other official as approved by the
Township is hereby appointed as the designated officer who is authorized
to carry out all responsibilities and duties stated herein.
In accordance with the applicable provisions of the Act, no
insurance company, association or exchange (hereinafter the "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 Lower Makefield Township where the amount recoverable for the
fire loss to the structure under all policies exceeds $7,500, unless
the insuring agent has complied with the requirements set forth in
Section 508(b) of Act 98 of 1992[1] as amended and unless there is compliance with Section
508(c) of Act 98 of 1992[2] as amended and the provisions of this chapter.
In accordance with the provisions of the Fire Insurance Escrow
Act, the Township Finance Director shall, within 14 working days of
a request by an insurer or insured, furnish to an insurer with insurance
coverage on the subject property either:
A.
Written notification or certificate that no delinquent taxes, assessments,
liens, penalties or user charges exist against the property as of
the date of the fire loss and that, as of the date of the written
notification, the Township had not incurred any costs for the removal,
repair or securing of any building or other structure on the property
damaged by said fire; or
B.
Written notification or certificate with a bill showing the amount
of delinquent taxes, assessments, liens, penalties and user charges
that have not been paid as against the property as of the date of
written notification and also showing, as of the date of the written
notification, the amount of the total costs, if any, incurred by the
Township for the removal, repair or securing of a building or other
structure on the property damaged by said fire.
Upon the receipt of a written notification or certificate and bill pursuant to § 110-5B above, the insurer shall return the bill along with payment to the Township Finance Director in the amount necessary to pay the delinquent taxes, assessments, penalties, charges, and costs as shown on the bill. Upon receipt of such amount, the Township shall apply or credit the payment to the items shown in the bill.
In accordance with the provisions of the fire insurance escrow
tax, if the fire loss is greater than $7,500 and equals or exceeds
60% of the aggregate coverage under all fire insurance policies covering
the building or structure, as determined in accordance with the provisions
of the Fire Insurance Escrow Act, the insurer(s) shall transfer from
the insurance proceeds to the Township Finance Director such amounts
as shall be determined in accordance with the formula set forth in
Section 508(c) of the Fire Insurance Escrow Act:[1]
A.
The insuring agent shall transfer from the insurance proceeds to
the Township Finance Director an aggregate of $2,000 for each $15,000
of a claim, and each fraction of that amount of a claim; or
B.
The insuring agent shall transfer to the Township from the insurance
proceeds that amount of a contractor's signed estimate of the
costs of removing, repairing, or securing the building or other structure
between the named insured and contractor at the time of the loss report;
or
C.
Such other amount as calculated in accordance with the provisions
of the Act. Transfer of proceeds under multiple insurance policies
shall be made on a pro-rata basis by all Insurers insuring the building
or property.
[1]
Editor's Note: See 40 P.S. § 638(c).
The insurance proceeds transferred to the Township under authority
of Section 508(c) of the Act[1] and § 110-7 of this chapter shall be accounted for and used in the following manner:
A.
The Township Finance Director 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 other structure as incurred
by the Township. Such costs shall include, without limitation, 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;
B.
The insurer, when transferring the funds, shall 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 named insured, the
Finance Director shall contact the named insured of the process for
disposition of the funds;
C.
When repairs, removal or securing of the building, structure or premises
have been completed in accordance with all applicable regulations
and orders of the Township and the required proof of such completion
has been received by the Township, and if the Township has not incurred
any costs for repairs, removal or securing of the building or other
structure, the funds shall be returned to the named insured. If the
Township has incurred costs for repairs, removal or securing of the
building or structure, the costs shall be paid from the fund and,
if excess funds remain, the Township shall transfer the remaining
funds to the named insured. If a deficiency is incurred by the Township,
the Township shall have the right and all available remedies to collect
any deficiency.
[1]
Editor's Note: See 40 P.S. § 638(c).
At the request of the Township or its representative, any person
who owns a building or structure damaged by fire or who is a named
insured under a fire insurance policy covering such building or structure
shall provide information to the Township regarding the insurer or
insurers providing fire insurance coverage on the building or structure
within the Township which has been damaged by fire and shall further
provide information to the Township concerning the insurance, the
loss and any other pertinent information relating thereto.
Nothing in this chapter shall be construed to limit the ability
of the Township to recover any costs, expenses or charges not covered
by the insurance proceeds. Nothing in this chapter 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.
In the event a person or an insurer fails or refuses to comply
with the requirements of this chapter and Section 508 of the Act,[1] a written notice of such violation shall be given. The
notice of violation shall identify the property, the insured, the
insurer, the violation, the remedial action required, the time allowed
for remedial action, and the penalty to be assessed for failure to
correct the violation.
[1]
Editor's Note: See 40 P.S. § 638.
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.
