The city is hereby authorized to utilize the procedure described in Ohio R.C. 3929.86(C) and (D), whereby no insurance company doing business in the state shall pay a claim of a named insured for fire damage to a structure located in the city, where the amount recoverable for the fire loss to the structure under all policies exceeds five thousand dollars ($5,000.00), unless there is compliance with the following procedures:
(a) (1) When the loss agreed to between a named insured and the company equals or exceeds 60 percent of the aggregate limits of liability on all fire policies covering the building or structure, the company, in accordance with Ohio R.C. 715.26(f), shall transfer from the insurance proceeds to the Fire Chief in the amount provided by Ohio R.C. 3929.86(C), as it currently states or as amended in the future. If at the time of a proof of loss agreed to by the named insured and the company, the named insured has submitted a contractor’s signed estimate of the costs of removing, repairing or securing the building or structure, the company shall transfer from the insurance proceeds the amount specified in the estimate.
(2) Such transfer of proceeds shall be on a prorata basis by all companies insuring the building or structure. Policy proceeds remaining after the transfer to the city shall be disbursed in accordance with the policy terms.
(3) The named insured may submit a contractor’s signed estimate of the costs of removing, repairing or securing the building or structure after the transfer. In such a case, the Fire Chief shall return the amount of the fund in excess of the estimate to the named insured, provided that the city has not commenced to remove, repair or secure the building or structure.
(4) A named insured shall immediately transfer to the Fire Chief any insurance proceeds which were required to be transferred by the insurance company to the Fire Chief under this section, but which were transferred to the named insured by the insurance company.
(b) (1) Upon receipt of the insurance proceeds by the city as authorized by this section, the Fire Chief shall place the proceeds in the city treasury in a separate subfund within Special State and County Fund No. 1700.83, entitled “Special State Fire Loss Insurance.” The proceeds shall be used solely as security against the total cost of removing, repairing or securing the building or structure incurred by the city pursuant to Ohio R.C. 715.261.
(2) When transferring the funds as required in division (a) hereof, an insurance company shall provide the city with the name and address of the named insured. The city shall then contact the named insured, certify that the proceeds have been received by the city and notify the insured that the following procedures will be followed.
A. The funds shall be returned to the named insured when the repair, removal or securing of the building or structure has been completed and the required proof received by the Fire Chief, if the city has not incurred any costs for such repair, removal or securing.
B. If the city has incurred any costs for the repair, removal or securing of the building or structure, such costs shall be paid from the funds.
C. 1. If excess funds remain, the city shall transfer the remaining funds to the named insured. Nothing in this section shall be construed to limit the ability of the city to recover any deficiency under Ohio R.C. 715.261.
2. Nothing in this section shall be construed to prohibit the city 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.
(c) The Fire Chief or Fire Inspector of the city is hereby designated as the officer authorized to carry out the duties of this section. The Fire Chief shall file a certified copy of this section with the Superintendent of Insurance of the state.
(Ord. 86-25, passed 4-10-1986; Am. Ord. 93-25, passed 5-27-1993; Am. Ord. 98-50, passed 9-24-1998)