Relating to demolition reserves on fire and casualty claims on real property located within a city and requesting an interim study on such reserves

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 percent of the payment for damages, whichever is greater, as a demolition cost reserve. Currently, the required amount is $10,000 or 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 percent of the face value of the policy covering the building or structure. The bill provides that in addition to any other remedies provided by law, if a city is required to demolish a damaged property at city expense and the expense exceeds the amount that the city recovers from the reserve, to recover the difference the city may file a civil action against the insured for failure to complete repairs to the property or to complete demolition of the property in compliance with applicable statutes and local ordinances. If the city prevails in a civil action, the damages that the court may award the city are detailed in the bill. 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.