Upon the receipt of a certificate pursuant to § 31.47(B), the insuring agent shall pay the claim of the named insured in accordance with the policy terms; provided, however, that if the loss agreed to between 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 shall be followed:
(A) The insuring agent shall transfer from the insurance proceeds to the designated municipal officer 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 municipality 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 on the property, the insuring agent shall transfer to the municipality from the insurance proceeds the amount specified in the estimate.
(C) The transfer of proceeds shall be on a pro rata basis by all companies, associations or exchanges insuring the building or other structure.
(D) It is the obligation of the insuring agent when transferring the proceeds to provide the municipality with the name and address of the named insured.
(E) If there is a transfer of insurance proceeds as specified in division (A) above, 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 designated municipal officer shall return the amount of the funds transferred to the municipality in excess of the estimate to the named insured if the municipality has not commenced to remove, repair or secure the building or other structure.
(F) Upon receipt of proceeds under this section the municipality shall do the following:
(1) Upon receipt of the transferred funds and the name and address of the named insured, the designated municipal officer shall contact the named insured, certify that the proceeds have been received by the municipality and notify the named insured that the procedures under this subsection shall be followed; and
(2) The designated municipal 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 that are incurred by the municipality such costs shall include, without limitation, any engineering, legal or administrative costs incurred by the municipality in connection with such removal, repair or securing of the building or any proceedings related thereto; and
(3) When removal, repairs or securing of the building or other structure has been completed in accordance with all applicable regulations and codes of the municipality and the required proof of such completion received by the designated municipal officer, and, if the municipality has not incurred any costs for removal, repairs, or securing of the building or other structure, the proceeds shall be returned to the named insured. If the municipality has incurred costs for removal, repairs or securing of the building or other structure, the costs shall be paid from the proceeds and if excess proceeds remain, the municipality shall transfer the remaining proceeds to the named insured; and
(4) To the extent that interest is earned on proceeds held by the municipality pursuant to this section and these proceeds are not to be returned to the named insured, such interest shall belong to the municipality. To the extent that proceeds are returned to the named insured, interest on such proceeds shall be distributed to the named insured at the time that the proceeds are returned.
(5) Nothing in this section shall be construed to limit the ability of the municipality to recover any deficiency. Furthermore, nothing in this section shall be construed to prohibit the municipality 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.
(Ord. 2010-01, passed 3-23-2010)