City Code, ExplainedBetaPardon our dust while we build this out — expect some changes along the way.

This chapter regulates how fire insurance claims are paid out for fire-damaged buildings in Pottsville, requiring insurers to route a portion of large claims through the city before paying the policyholder, and to check for delinquent property taxes before paying any claim.

Who this affects

It affects property owners who file fire insurance claims and the insurance companies that pay them: insurers must get municipal certificates and, on larger losses, transfer part of the insurance proceeds to the city to secure repair/removal costs or pay off delinquent taxes.

Key rules

• No insurer may pay a fire damage claim exceeding $7,500 without a municipal certificate from the Municipal Officer and compliance with this chapter.
• If the agreed loss equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the structure, the insurer must transfer $2,000 to the Municipal Officer for each $15,000 of the claim (or fraction thereof), with a minimum transfer of $2,000 for claims of $15,000 or less.
• If the named insured has submitted a contractor's signed estimate lower than the formula amount, the insurer transfers the (lower) estimate amount instead.
• Transfers are made pro rata among all insurers covering the structure; remaining proceeds after transfer go to the insured per the policy terms.
• The Municipal Officer must hold transferred proceeds in a separate fund used only as security against the city's costs (including engineering, legal, or administrative costs) to remove, repair, or secure the building.
• The insurer must give the municipality the named insured's name and address when transferring funds; the Municipal Officer must then contact the insured and certify receipt of the proceeds.
• Once repairs/removal/securing are completed and proof is received, if the municipality incurred no costs, the full fund is returned to the named insured; if costs were incurred, they are paid from the fund and any excess is returned.
• Interest earned on proceeds retained by the municipality belongs to the municipality; interest on proceeds returned to the insured is distributed to the insured at the time of return.
• The municipality and named insured may agree to transfer funds to the insured instead if some other reasonable disposition of the damaged property has been negotiated.
• The city may adopt fees by resolution for related municipal activities, including issuing certificates and bills, inspections, and opening separate fund accounts.
• Separately, no insurer may pay a fire damage claim exceeding $7,500 without first obtaining a certificate on delinquent taxes for the property from the Municipal Officer.
• The Municipal Officer must furnish, within 14 working days of a written request specifying the property, insurer, and loss-report date, either a certificate that no taxes/assessments/penalties/user charges are delinquent, or a certificate and bill showing the delinquent amounts and any municipal costs certified against the property.
• If a certificate and bill show delinquent amounts, the insurer must transfer to the Municipal Officer the lesser of the amount owed or the full insurance proceeds, to be applied to the bill.
• Transfers under the delinquent-tax provisions are made on a pro rata basis among all insurers with applicable fire policies.
• Nothing in either Article limits the municipality's ability to recover any deficiency beyond what is transferred.

Penalties

"Any owner of property, any named insured or any insurer who violates this Article shall be subject to a penalty of up to one thousand dollars ($1,000.) per violation." (This penalty applies separately under both Article I and Article II.)

Notable and archaic details

• The chapter effectively lets the city intercept part of a homeowner's fire insurance payout to guarantee that a damaged building gets repaired, removed, or secured, and to cover unpaid property taxes, before the resident sees the remaining funds.
• The $7,500 claim threshold and the specific transfer formula ($2,000 per $15,000 of claim) are stated in exact, unadjusted dollar figures dating to the ordinances' 1995 adoption.