West Virginia Lawmakers Approve Insurance Liens for Cities

March 15, 2010

Lawmakers have signed off on allowing West Virginia’s cities and towns to tap insurance proceeds when clearing away buildings destroyed by fire.

The Senate has sent Gov. Joe Manchin his proposal to allow municipalities to file insurance liens. The House of Delegates passed the measure last week.

The measure is one of two bills requested by Manchin that aim to help cities and towns deal with unsafe eyesores that can hinder economic development and attract crime.

It would also increase local home rule in a state with one of the country’s most centralized government structures.

Supporters believe it could also resolve a lawsuit filed against Huntington by the West Virginia Insurance Federation. The insurance trade group helped draft the bill.

The new law is a compromise worked out among municipalities, insurers and officials following an industry dispute over an ordinance in the city of Huntington. That measure forced insurers to pay funds on some total fire losses to the city rather than directly to policyholders, which insurers said would violate state law and their private contracts with insureds.

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