West Virginia City Agrees to Suspend Home Insurance Escrow Rule

August 3, 2009

Officials in Huntington, West Virginia have agreed to temporarily delay a new ordinance that allows the city to withhold insurance payouts made on fire-damaged buildings.

The law went into effect July 1 and is designed to prevent owners from taking insurance settlements without repairing their buildings.

The law is part of a home rule experiment that gives Huntington and three other cities greater control of their operations.

The West Virginia Insurance Federation sued the city, saying the home rule pilot program is unconstitutional.

Last Thursday, a Cabell County circuit judge issued an order that puts the ordinance on hold. Officials say it gives both sides more time to seek a permanent solution.

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