West Virginia Seeks Alternative to Debris Removal Insurance Claim Spat

August 12, 2009

Out of concern that a dispute over a local West Virginia insurance ordinance in the city of Huntington could jeopardize home rule pilot programs across the state, Gov. Joe Manchin met with city, state and insurance officials last Friday to try to find a compromise.

No final resolution emerged but all parties were asked to consider an alternative proposal that would allow Huntington to collect for debris removal costs in a way that insurers might find acceptable, while avoiding a constitutional challenge to the state’s home rule law.

According to Jill Cranston Bentz, president, West Virginia Insurance Federation, Insurance Commissioner Jane Cline presented the alternate proposal and the industry is now reviewing it.

The federation has filed a lawsuit challenging a Huntington ordinance that forces insurers to first pay the city for any debris removal or back taxes owed by the owner of an insured property that suffers a total fire loss. Insurers say state law requires them to pay all proceeds directly to policyholders, a view shared by the state’s insurance department and Cline.

The industry’s lawsuit against the debris removal ordinance also challenges the constitutionality of the state’s home rule law under which the debris removal ordinance was enacted.

Bentz said lawyers for all parties will hold a working meeting later this week on the Cline proposal. She told Insurance Journal she hopes an out-of-court resolution can be found.

Was this article valuable?

Here are more articles you may enjoy.