Bill
Bill > A5030
NJ A5030
Permits municipalities to place lien on fire-damaged property's insurance proceeds in certain instances and requires fire and explosion insurance coverage for certain individuals.
summary
Introduced
11/14/2024
11/14/2024
In Committee
11/14/2024
11/14/2024
Crossed Over
Passed
Dead
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill permits a municipality to place a lien on a fire-damaged property's insurance proceeds in certain instances and requires fire and explosion insurance coverage for certain individuals. Under the bill, a municipality will be allowed to place a lien on a fire-damaged property's insurance proceeds. A municipality that adopts an ordinance allowing these liens to be placed will be required to ensure that the ordinance provides for the release or return to the insured any amounts to which the insured would otherwise be entitled to claim, provided that the insured agrees with the municipality in writing to restore the fire damaged property to the same or improved condition that the premises was prior to the damage within four months or 120 days. Municipalities that adopt an ordinance to allow the municipality to place a lien on a fire-damage property's insurance proceeds must include a procedure within the ordinance to withhold payment by the insurer of the proceeds. The bill additionally provides that, for municipalities who adopt the ordinance, if reasonable proof that the damaged or destroyed portions of the insured structure is not received by or shown to an authorized representative of the municipality within 120 days after the policy proceeds was received by the municipality, the municipality may retain and use the policy proceeds to secure, repair, or demolish the structure and property to comply with local code requirements and applicable ordinances of the municipality. The bill also provides that the owner of a business or owner of a rental unit or units will be required to maintain liability insurance for damage cause by fire or explosion in an amount that is no less than $500,000 for combined property damage and bodily injury to or death of one or more person in any one accident or occurrence. Owners of a multifamily home that is four or fewer units, one of which is owner-occupied, shall also maintain similar liability insurance for damage caused by a fire or explosion in an amount that is no less than $300,000 for combined property damage and bodily injury to or death of one or more person in any one accident or occurrence.
AI Summary
This bill permits municipalities to place a lien on insurance proceeds for fire-damaged properties under specific conditions and requires certain property owners to maintain liability insurance for fire and explosion damages. The bill allows municipalities that adopt a specific ordinance to claim a statutory lien on fire insurance proceeds, which would be used to restore or secure the damaged property. The lien would be limited to the insurance coverage amount for the property and would be prioritized over most other claims except those of mortgage holders. Property owners would be required to agree in writing to restore the damaged property within 120 days, and if they fail to do so, the municipality could retain and use the insurance proceeds to repair, secure, or demolish the property. Additionally, the bill mandates that business owners and rental property owners maintain liability insurance covering fire and explosion damages, with coverage amounts of $500,000 for most properties and $300,000 for smaller multifamily homes with an owner-occupied unit. The bill provides detailed procedures for how municipalities can implement these liens, including notification requirements, timeframes for action, and methods for releasing or using the withheld insurance proceeds. The legislation is designed to help municipalities address abandoned or neglected fire-damaged properties and ensure proper restoration or removal of unsafe structures.
Committee Categories
Business and Industry
Sponsors (1)
Last Action
Introduced, Referred to Assembly Financial Institutions and Insurance Committee (on 11/14/2024)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/A5030 |
| BillText | https://pub.njleg.gov/Bills/2024/A5500/5030_I1.HTM |
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