HF 2112 (LSB 5998HH (2) 87)

HOUSE FILE 2112

BY  WOLFE and MOMMSEN

A BILL FOR

An Act relating to demolition reserves on fire and casualty claims on real property located within a city and requesting an interim study on such reserves.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 515.139, subsection 1, unnumbered paragraph 1, Code 2018, is amended to read as follows:
   An insurer shall reserve ten twenty thousand dollars or ten twenty percent, whichever amount is greater, of the payment for damages to the property excluding personal property on which the insurer has issued a fire and casualty insurance policy as demolition cost reserve if the following are applicable:
    Sec. 2.  DEMOLITION RESERVE ON FIRE AND CASUALTY CLAIMS ON PROPERTY —— STUDY REQUEST.  The legislative council is requested to establish an interim study committee for the purpose of reviewing section 515.139 to consider whether the statute adequately meets the needs of cities of various sizes and geographic locations within the state, and reporting its findings and recommendations, if any, to the general assembly.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that an insurer that has issued a fire and casualty insurance policy for the payment of damages to real property located in a city must reserve an amount equal to $20,000 or 20 percent of the payment for damages, whichever is greater, as a demolition cost reserve. Currently, the required amount is $10,000 or 10 percent of the payment, whichever is greater. 
   A city can claim proceeds from the reserve if the city incurs costs to demolish a building where the damage to the property renders it uninhabitable or unfit for its purpose, without repair, and proof of loss indicates that damage to the insured structure or building exceeds 75 percent of the face value of the policy covering the building or structure.
   The bill also includes a request that the legislative council establish an interim study committee for the purpose of reviewing the demolition reserve statute to consider whether the statute adequately meets the needs of cities of various sizes and geographic locations within the state.