(A) No insurance company, association or exchange (hereinafter referred to as the “insuring agent”) doing business in the commonwealth 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 named insured or insuring agent is furnished by the Township Administrative Secretary/Treasurer with a municipal certificate pursuant to § 508(b) of Act 98 of 1992 (see 40 P.S. § 638) and unless there is compliance with § 508(c) and (d) of Act 98 of 1992 and the provisions of this subchapter.
(B) Where the Township Administrative Secretary/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 is 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 other structure, the following procedures must be followed.
(1) Amount of transfer.
(a) The insuring agent shall transfer from the insurance proceeds to the Township Administrative Secretary/Treasurer 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
(b) 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 in an amount less than the amount calculated under the foregoing transfer formula, the insuring agent shall transfer to the township from the insurance proceeds the amount specified in the estimate.
(2) Transfer of proceeds. The transfer of proceeds shall be on a pro rata basis by all companies, associations or exchanges insuring the building or other structure.
(3) Signed estimate. 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 Township Administrative Secretary/Treasurer 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.
(4) Township action. Upon receipt of proceeds under this section, the township shall do the following.
(a) The Township Administrative 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 township. Such costs shall include, without limitation, any 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) 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 named insured, the Township Administrative Secretary/Treasurer shall contact the named insured, certify that the proceeds have been received by the township and notify the named insured that the procedures under this division (B) shall be followed.
(c) When repairs, removal or securing of the building or other structure has been completed in accordance with all applicable regulations and orders of the township and the required proof of such completion received by the Township Administrative Secretary/Treasurer, and if the township has not incurred any costs for repairs, removal or securing, the fund shall be returned to the named insured. If the township has incurred costs for repairs, removal or securing of the building or other structure, the cost shall be paid from the fund, and if excess funds remain, the township shall transfer the remaining funds to the named insured.
(d) To the extent that interest is earned on proceeds held by the township pursuant to this section and not returned to the named insured, such interest shall belong to the township. 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.
(5) Deficiencies. Nothing in this section shall be construed to limit the ability of the township to recover any deficiency. Furthermore, nothing in this division (B) 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.
(2003 Code, § 101-2) (Ord. 3-92, passed 12-29-1992) Penalty, see § 34.99