House Bill 4038 History
H. B. 4038
(By Mr. Speaker, (Mr. Thompson) and Delegate Armstead)
[By Request of the Executive]
[Introduced January 15, 2010; referred to the
Committee on the Judiciary.]
A BILL to repeal §33-17-9a of the Code of West Virginia, 1931, as
amended; to amend said code by adding thereto a new section,
designated §33-12C-6a; to amend and reenact §33-17-9b of said
code; and to amend said code by adding thereto a new article,
designated §38-10E-1 and §38-10E-2, all relating to imposing
a statutory lien on fire insurance proceeds in the event of a
total loss to real property; requiring insurance companies to
notify insured and municipality or county after determining
that a claim involves a total loss to real property; defining
terms; requiring a municipality or county to perfect the lien
within thirty days of notice of a total loss determination;
providing for release of the lien upon satisfaction of certain
conditions; and authorizing the Insurance Commissioner to
declare surplus lines insurers ineligible for certain
Be it enacted by the Legislature of West Virginia:
That §33-17-9a of the Code of West Virginia, 1931, as amended,
be repealed; that said code be amended by adding thereto a new
section, designated §33-12C-6a; to amend and reenact §33-17-9b of
said code; and to amend said code by adding thereto a new article,
designated §38-10E-1 and §38-10E-2, all to read as follows:
CHAPTER 33. INSURANCE.
ARTICLE 12. SURPLUS LINE.
§33-12C-6a. Debris removal liens; noncompliance; penalties.
The commissioner may declare a surplus lines insurer
ineligible for any violation of the provisions of article ten-e,
chapter thirty-eight of this code.
ARTICLE 17. FIRE AND MARINE INSURANCE.
§33-17-9b. Claims for total loss; debris removal proceeds.
No proceeds shall be paid by an insurance company
has issued a policy which provides coverage for debris removal
for cleanup, removal of refuse, debris, remnants, or remains of a
dwelling or structure upon a claim of total loss unless and until
the insurance company receives certification that the refuse,
debris, remnants, or remains of the dwelling or structure have been
cleaned up, removed or otherwise disposed of. In the event the
insurance company receives, within six months of the date of loss,
certification that such cleanup, removal or disposal costs have been incurred by a municipality, county or other governmental
entity, rather than the policyholder, such debris removal and
cleanup proceeds shall be paid to the municipality, county or other
government entity which has incurred such costs: Provided, That
any company that has issued a policy that provides coverage for
damage to real property as a result of fire or explosion,
regardless of whether such policy includes coverage for debris
removal, shall comply with the provisions of section one, article
ten-e, chapter thirty-eight of this code.
No insurance company subject to this section which complies
with this section may be held liable for any claim that may arise
out of the cleanup, removal or disposal of debris pursuant to this
An insurance company subject to this section
complies with this section and with section one, article ten-e,
chapter thirty-eight of this code
shall be deemed to have fully
satisfied all contractual obligations to the policyholder regarding
debris removal; in no event shall an insurance company be required
to pay moneys in excess of policy limits for debris removal.
CHAPTER 38. LIENS.
ARTICLE 10E. LIEN ON INSURANCE PROCEEDS FOR DEBRIS REMOVAL.
§38-10E-1. Debris removal; notice of insurance proceeds; lien of
municipality and county.
(a)(1) Notwithstanding any provision of this code to the
contrary, the receipt by an insurance company of a claim under a
fire insurance policy for a total loss to real property creates a
statutory lien on the insurance proceeds payable for such claim in
favor of the municipality in which the property is situate or, if
the property is located outside a municipality, the county in which
the property is situate, in an amount equal to the greater of: (A)
$5,000; or (B) ten percent of the policy limits for loss to the
real property, including any coverage for debris removal:
Provided, That the amount of the lien may not exceed the policy
limits of coverage for the real property plus debris removal, if
any: Provided, however, That the lien created by this subsection
does not apply to proceeds payable under the policy for any losses
other than those to the real property insured, including loss of
personal property and payments for temporary housing and related
(2) The terms "municipality" and "treasurer" have the same
meanings ascribed to them in section two, article one, chapter
eight of this code.
(b) Within ten days of a determination that a claim involves
a total loss, the insurance company shall send certified letters to
the insured and, as applicable, to the treasurer of the
municipality in which the property is situate or, if the property
is situate outside a municipality, to the sheriff of the county in which the property is situate, stating any amount claimed; the
limits and conditions of coverage; the location of the property;
the terms and limits of coverage designated by the insurance policy
for securing, cleanup and removal, if any; any time limitations
imposed on the insured for securing, cleanup and removal; and the
policyholder's name and mailing address.
(c)(1) The lien created pursuant to subsection (a) of this
section shall be discharged unless the municipality or county,
whichever is applicable, within thirty days of the receipt of the
letter sent in accordance with subsection (b) of this section,
perfects and preserves such lien by filing a notice thereof with
the clerk of the county commission of the county in which such
property is situate: Provided, That upon filing of a notice of
lien in accordance with this subdivision, the amount of the lien
created in subsection (a) shall thereafter be for the estimated
cost of cleanup contained in such notice of lien: Provided,
however, That the discharge of a lien based on the municipality's
or county's failure to file a notice pursuant to this subdivision
does not affect any other remedies the municipality or county may
have with respect to such property or the liability of the property
(2) A notice of lien filed in accordance with this subsection
shall include a statement of the estimated cost to the municipality
or county for the cleanup of the damaged property, removal of any refuse, debris, remnants or remains of the building and
appurtenances, and securing the structure: Provided, That such
estimated cost may not exceed the amount of the lien created
pursuant to subsection (a) of this section.
(3) A notice of lien filed in accordance with this section
shall be notarized and shall be sufficient if in form and effect as
Notice of Lien for Debris Removal
To (name of insurance company):
You will please take notice that the undersigned, on behalf of
the (municipality or county) (of County, if a municipality), West
Virginia, has estimated that the cost of removing debris and
otherwise cleaning up (a certain building, other structure or
improvement) on real estate known as (an adequate and ascertainable
description of the real estate) would be (estimated cleanup cost).
You are further notified that, in order to secure the payment
of such sum, the undersigned, on behalf of the (municipality or
county) and pursuant to the provisions of section one, article
ten-e, chapter thirty-eight of the West Virginia Code, claims a
lien in such amount upon the interest of (policyholder's name) in
a fire insurance policy (the policy number or other identifying
information) issued by (the insurance company's name and address).
(Signature of treasurer or municipal officer exercising the
power and authority commonly exercised by a treasurer, or sheriff)
(d) The clerk of the county commission shall, upon the filing
of such notice, index the same in a book in his or her office
called "Debris Removal Liens" as a lien against the insurance
proceeds in favor of the municipality or county.
§38-10E-2. Release of lien.
(a) A lien recorded in accordance with section one of this
article shall be released if the municipality or county determines
that the property has been satisfactorily cleaned up or repaired,
that satisfactory measures have been taken to assure that the
property will be repaired or cleaned up within a reasonable time,
or that the insurance company has paid the amount of the lien to
the municipality or county or such person designated to receive
(b) Upon the satisfaction of a lien in accordance with
subsection (a) of this section, the treasurer or sheriff, whichever
is applicable, shall sign a release and cause it to be recorded by
the clerk of the county commission in the "Debris Removal Liens"
book and, immediately upon recordation, he or she shall send a
certified copy thereof to the insurance company: Provided, That if
a lien has been paid or otherwise satisfied and the treasurer or
sheriff refuses to cause such lien to be released, the insurance
company or policyholder may apply to the circuit court for an order
compelling the clerk to record a release.
NOTE: The purpose of this bill is to establish a statutory
lien on insurance proceeds for total loss to real property in favor
of a municipality or county and require that such proceeds be made
available for the cleanup of the property.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would