This bill enables municipalities in New Jersey to place a lien on the insurance proceeds of properties damaged by fire, contingent upon the adoption of an ordinance that outlines specific conditions. Key definitions such as "enforcement officer," "final settlement," and "total loss" are established to clarify the bill's provisions. The lien will take precedence over other claims, except for those of mortgagees, and will specifically cover costs related to the restoration of the fire-damaged property. Municipalities are required to notify insurance companies and must provide a mechanism for property owners to restore their properties within a designated timeframe to access the insurance proceeds subject to the lien.

Additionally, the bill mandates that owners of businesses and rental units maintain liability insurance for fire or explosion damages, with minimum coverage amounts set at $500,000 for businesses and $300,000 for multifamily homes with four or fewer units. This requirement aims to ensure sufficient financial protection against liabilities arising from fire-related incidents. The legislation also allows municipalities to escrow withheld insurance amounts and outlines the process for releasing funds once restoration is verified. The bill is set to take effect 180 days after its enactment, ensuring municipalities can recover costs associated with fire damage while providing a structured process for property owners.

Statutes affected:
Introduced: 17:36-9, 40A:10A-1