632.102(2)(b) (b) The lesser of $7,500 or the limits under the policy for coverage of the building or other structure affixed to land that sustained the loss.
632.102(3) (3)Notice of withholding.
632.102(3)(a)(a) Within 10 days after withholding the amount determined under sub. (2), the insurer shall deliver written notice of the withholding to all of the following persons:
632.102(3)(a)1. 1. The building inspection official of the 1st class city in which the insured real property is located.
632.102(3)(a)2. 2. The named insured.
632.102(3)(a)3. 3. Any mortgagee or other lienholder who has an existing lien against the insured real property and who is named in the policy.
632.102(3)(a)4. 4. If the final settlement was determined by judgment, the court in which the judgment was entered, in addition to the persons described in subds. 1. to 3.
632.102(3)(b) (b) The notice of withholding shall include all of the following information:
632.102(3)(b)1. 1. The identity and address of the insurer.
632.102(3)(b)2. 2. The name and address of the named insured and each mortgagee or other lienholder entitled to notice under par. (a) 3.
632.102(3)(b)3. 3. The address of the insured real property.
632.102(3)(b)4. 4. The date of loss, policy number and claim number.
632.102(3)(b)5. 5. The amount of money withheld.
632.102(3)(b)6. 6. A summary of ss. 632.10 to 632.104, including a statement explaining all of the following:
632.102(3)(b)6.a. a. That for the 1st class city to qualify for reimbursement of expenses from the funds withheld under this section, the 1st class city must, after the loss occurs but within 90 days after delivery of the notice of withholding under this subsection, commence proceedings under s. 66.05, 254.595 or 823.04 or under a local ordinance relating to demolition or abatement of nuisances or obtain a release signed by the named insured consenting to demolition with respect to the building or other structure; that if the 1st class city commences the proceedings or obtains the release within that time period, a part or all of the withheld funds may be used to defray the 1st class city's expenses; and that the withheld funds will be released to the named insured and other interests named in the policy if the 1st class city does not commence the proceedings or obtain the release within that time period.
632.102(3)(b)6.b. b. That the withheld funds may be released to the named insured and other interests named in the policy if an official of the 1st class city determines under s. 632.103 (3) that the building or other structure has been repaired or replaced or the site restored to a dust-free and erosion-free condition.
632.102(4) (4)Insurer's liability. In no event may an insurer be liable under a policy subject to ss. 632.10 to 632.104 for any amount greater than the lesser of the final settlement or the limits of liability set out in the policy.
632.102(5) (5)Immunity for insurer. No cause of action may arise against and no liability may be imposed upon an insurer or an agent or employe of an insurer for paying, withholding or transferring all or any portion of a final settlement as provided in ss. 632.10 to 632.104.
632.102 History History: 1989 a. 347; 1993 a. 27; 1995 a. 27.
632.103 632.103 Procedure for payment of withheld funds.
632.103(1)(1)Release to 1st class city.
632.103(1)(a)(a) To qualify for reimbursement of expenses under sub. (2), the 1st class city must do any of the following:
632.103(1)(a)1. 1. Commence proceedings under s. 66.05, 254.595 or 823.04 or under a local ordinance relating to demolition or abatement of nuisances, with respect to the building or other structure for which the funds are withheld.
632.103(1)(a)2. 2. Obtain a release signed by the named insured consenting to demolition of the building or other structure with respect to which the funds are withheld.
632.103(1)(b) (b) The 1st class city shall commence proceedings under par. (a) 1. or obtain the release under par. (a) 2. after the occurrence of the loss to the building or other structure by fire or explosion but within 90 days after delivery of the notice of withholding under s. 632.102 (3).
632.103(1)(c) (c) When proceedings described in par. (a) 1. are commenced, the 1st class city shall notify, in writing, the insurer, the named insured and any mortgagee or other lienholder identified in the notice of withholding under s. 632.102 (3) (b) 2. that the proceedings are commenced.
632.103(1)(d) (d) The 1st class city shall release all interest in the amount withheld under s. 632.102 (2) and the insurer shall promptly pay that amount to the named insured and other interests named in the policy if any of the following occurs:
632.103(1)(d)1. 1. The 1st class city fails to commence proceedings described in par. (a) 1. or obtain a release described in par. (a) 2. within the period provided in par. (b).
632.103(1)(d)2. 2. The 1st class city fails to notify the insurer as provided in par. (c).
632.103(2) (2)Reimbursement of expenses.
632.103(2)(a)(a) If the 1st class city satisfies sub. (1) (a) and (b) and, if applicable, notifies the insurer as required in sub. (1) (c), the insurer shall promptly upon receiving the statement under par. (b) deliver to the 1st class city funds withheld from the named insured's final settlement under s. 632.102 (2), to the extent necessary to reimburse the 1st class city for any of the following expenses:
632.103(2)(a)1. 1. Costs incurred in the course of enforcing s. 66.05 or a local ordinance relating to demolition, with respect to the building or other structure for which the funds are withheld.
632.103(2)(a)2. 2. Costs incurred in acting in accordance with a release signed by the named insured consenting to demolition of the building or other structure with respect to which the funds are withheld.
632.103(2)(a)3. 3. Costs incurred in abating a public nuisance under s. 254.595 or 823.04 or under a local ordinance relating to abating a public nuisance, with respect to the building or other structure for which the funds are withheld.
632.103(2)(a)4. 4. Reasonable administrative expenses incurred in connection with activities described in subds. 1. to 3., including but not limited to expenses for inspection, clerical, supervisory and attorney services.
632.103(2)(b) (b) The insurer may not release any withheld funds to the 1st class city under par. (a) unless the 1st class city delivers to the insurer and the named insured an itemized statement of the actual costs incurred under par. (a) 1. to 4.
632.103(2)(c) (c) The insurer shall promptly deliver to the named insured and other interests named in the policy any portion of the withheld funds that are not released to the 1st class city under par. (a).
632.103(3) (3)Release to named insured. Except as provided in sub. (2), the insurer shall promptly deliver to the named insured and other interests named in the policy the funds withheld from the named insured's final settlement under s. 632.102 (2) if the 1st class city delivers a notice to the insurer that the building inspection official of the 1st class city, or other person who is authorized by the 1st class city's governing body to represent the 1st class city, has inspected the insured real property and verifies any of the following:
632.103(3)(a) (a) That the damaged or destroyed portions of the building or other structure with respect to which the funds are withheld have been repaired or replaced in compliance with applicable building and safety standards, except to the extent that the withheld funds are needed to complete repair or replacement.
632.103(3)(b) (b) That the damaged or destroyed building or other structure with respect to which the funds are withheld and all remnants of the building or other structure have been removed from the land on which the building or other structure was situated and the site has been restored to a dust-free and erosion-free condition in compliance with applicable building and safety standards.
632.103 History History: 1989 a. 347; 1991 a. 32; 1993 a. 27.
632.104 632.104 Funds released to mortgagee.
632.104(1) (1)First mortgage in default. The insurer shall release to a mortgagee funds withheld under s. 632.102, in an amount and within the period provided in sub. (2), if all of the following conditions are satisfied:
632.104(1)(a) (a) The mortgagee holds a first mortgage on the real property with respect to which the funds are being withheld, and the mortgage is in default.
632.104(1)(b) (b) The mortgage was executed before March 1, 1991.
632.104(1)(c) (c) The mortgagee delivers to the insurer a written request for release of the funds within 15 days after delivery of the notice of withholding under s. 632.102 (3).
632.104(2) (2)Amount released; timing. If sub. (1) is satisfied, the insurer shall release to the mortgagee all or any portion of the funds withheld with respect to the mortgaged property as is necessary to satisfy an outstanding first lien mortgage of the mortgagee. The insurer shall release the funds within 10 days after receiving the request under sub. (1) (c).
632.104 History History: 1989 a. 347.
subch. II of ch. 632 SUBCHAPTER II
SURETY INSURANCE
632.14 632.14 Bonds need not be under seal. No suretyship obligation need be under seal unless a seal is required by the applicable federal law or law of another jurisdiction.
632.14 History History: 1975 c. 375.
632.17 632.17 Validity of surety bonds.
632.17(1) (1)Failure to file certificate. No instrument executed by an insurer authorized to do a surety business is ineffective because of failure to file the certificate of its authority to do business in this state or a certified copy thereof; but the officer with whom any instrument so executed has been filed or any person who might claim the benefit thereof may by written notice require the person filing the instrument to have a certified copy of the certificate of authority filed with the officer, and unless the copy is filed within 8 days after receipt of the notice the instrument does not satisfy the requirement that the instrument be supplied.
632.17(2) (2)Satisfaction of obligations to provide surety. An undertaking in appropriate terms issued by an insurer authorized to do a surety business satisfies and is complete compliance with any authorization or requirement in the law of this state respecting surety bonds, undertakings or other similar obligations, and shall be accepted as such by any official authorized to receive or empowered to require such an undertaking, subject to sub. (1).
632.17 History History: 1975 c. 375.
632.18 632.18 Rustproofing warranties insurance. A policy of insurance to cover a warranty, as defined in s. 100.205 (1) (g), shall fully cover the financial integrity of the warranty.
632.18 History History: 1985 a. 29.
subch. III of ch. 632 SUBCHAPTER III
LIABILITY INSURANCE IN GENERAL
632.22 632.22 Required provisions of liability insurance policies. Every liability insurance policy shall provide that the bankruptcy or insolvency of the insured shall not diminish any liability of the insurer to 3rd parties and that if execution against the insured is returned unsatisfied, an action may be maintained against the insurer to the extent that the liability is covered by the policy.
632.22 History History: 1975 c. 375.
632.23 632.23 Prohibited exclusions in aircraft insurance policies. No policy covering any liability arising out of the ownership, maintenance or use of an aircraft, may exclude or deny coverage because the aircraft is operated in violation of air regulation, whether derived from federal or state law or local ordinance.
632.23 History History: 1975 c. 375.
632.24 632.24 Direct action against insurer. Any bond or policy of insurance covering liability to others for negligence makes the insurer liable, up to the amounts stated in the bond or policy, to the persons entitled to recover against the insured for the death of any person or for injury to persons or property, irrespective of whether the liability is presently established or is contingent and to become fixed or certain by final judgment against the insured.
632.24 History History: 1975 c. 375.
632.24 Annotation Excess-of-policy coverage clause in reinsurance agreement constituted a liability insurance contract insuring against tortious failure to settle claim. Ott v. All-Star Ins. Corp. 99 W (2d) 635, 299 NW (2d) 839 (1981).
632.24 Annotation See note to 893.80, citing Gonzalez v. City of Franklin, 137 W (2d) 109, 430 NW (2d) 747 (1987).
632.24 Annotation Insurers must plead and prove their policy limits prior to verdict to restrict the judgment to the policy limits. Price v. Hart, 166 W (2d) 182, 480 NW (2d) 249 (Ct. App. 1991).
632.24 Annotation This section does not apply to actions where the principal on a bond under s. 344.36 causes injury; that section requires obtaining a judgment against the principal before an action may be brought against the surety. Vansguard v. Progressive Northern Insurance Co. 188 W (2d) 584, 525 NW (2d) 146 (Ct. App. 1994).
632.24 Annotation There is neither a statutory nor a constitutional right to have all parties identified to a jury, but as a procedural rule, the court should in all cases apprise the jurors of the names of all the parties. Stoppleworth v. Refuse Hideway, Inc. 200 W (2d) 512, 546 NW (2d) 870 (Ct. App. 1996).
632.24 Annotation Federal compulsory counterclaim rule precluded action against insurer under state direct action statute where action directly against insured was barred by rule. Fagnan v. Great Central Ins. Co. 577 F (2d) 418 (1978).
632.24 Annotation Breach of fiduciary duty was negligence for purposes of Wisconsin's direct action and direct liability statutes. Federal Deposit Ins. Co. v. MGIC Indem. Corp. 462 F Supp. 759 (1978).
632.24 Annotation Insurer's failure to join in insured motorist's petition to remove to federal court necessitated remand to state court. Padden v. Gallaher, 513 F Supp. 770 (1981).
632.25 632.25 Limited effect of conditions in employer's liability policies. Any condition in an employer's liability policy requiring compliance by the insured with rules concerning the safety of persons shall be limited in its effect in such a way that in the event of breach by the insured the insurer shall nevertheless be responsible to the injured person under s. 632.24 as if the condition has not been breached, but shall be subrogated to the injured person's claim against the insured and be entitled to reimbursement by the latter.
632.25 History History: 1975 c. 375.
632.25 Annotation "Condition" as used in this section does not refer to exclusion. Bortz v. Merrimac Mutual Ins. Co. 92 W (2d) 865, 286 NW (2d) 16 (Ct. App. 1979).
632.26 632.26 Notice provisions.
632.26(1)(1)Required provisions. Every liability insurance policy shall provide:
632.26(1)(a) (a) That notice given by or on behalf of the insured to any authorized agent of the insurer within this state, with particulars sufficient to identify the insured, is notice to the insurer.
632.26(1)(b) (b) That failure to give any notice required by the policy within the time specified does not invalidate a claim made by the insured if the insured shows that it was not reasonably possible to give the notice within the prescribed time and that notice was given as soon as reasonably possible.
632.26(2) (2)Effect of failure to give notice. Failure to give notice as required by the policy as modified by sub. (1) (b) does not bar liability under the policy if the insurer was not prejudiced by the failure, but the risk of nonpersuasion is upon the person claiming there was no prejudice.
632.26 History History: 1979 c. 102.
632.26 Annotation Legislative Council Note, 1979: Subsection (1) is former s. 632.32 (1), altered in 2 ways: (1) to extend its coverage to all liability policies; and (2) to change "may" to "shall". The subsection is divided into 2 paragraphs for clarity.
632.26 Annotation The first change would strengthen the law. It is entirely new and seems a desirable extension.
632.26 Annotation The second change corrects an error. The word "shall" was used in the fourth draft of the bill that ultimately became ch. 375, laws of 1975, and was not changed in the addendum to the fourth draft, dated July 14, 1975. Those documents went to the insurance laws revision committee and then to the legislative council for action. Nothing appears in the minutes of the committee's meeting of July 14, 1975 to indicate that a change was made. But in LRB-6218/1 of 1975, "may" appears instead of "shall". That error, which was probably inadvertent and the source of which we have not been able to trace, was carried on into the final enactment.
632.26 Annotation Sub. (2) continues the second sentence of former s. 632.34 (4). Shifting it to s. 632.26, which is applicable to all liability insurance, broadens its application, but that seems desirable. The term "burden of proof" is changed to "risk of nonpersuasion" to tighten up the meaning. "Burden of proof" is a broad term that comprehends 2 separate concepts: (1) the burden of going forward with the evidence and (2) the burden of persuading the trier of fact, better termed the "risk of nonpersuasion". See McCormick, Evidence, (2nd ed.), at 784 n. 4 (1972). The statute is concerned with determining who wins when the totality of evidence is inconclusive, not with the burden of going forward, which ought to be settled on the basis of general principles. Indeed, since the insurer will have best (or the only) access to information about prejudice, it may be quite unfair to put the burden of going forward on the claimant.
632.26 Annotation Subs. (1) (b) and (2) are related. The first is a required provision in the policy. The 2nd is a rule of law. It is preferable not to go too far in inserting excuses into the policy. Sub. (1) (b) encourages the insured not to give up automatically if notice is not timely given, but insertion of sub. (2) into the policy would arguably encourage an unduly long delay that might prejudice both parties. [Bill 146-S]
632.26 Annotation Trial court erred in finding that plaintiff insured failed to prove nonprejudicial effect of 12 month delay in notifying defendant insurer. Ehlers v. Colonial Penn Ins. Co. 81 W (2d) 64, 259 NW (2d) 718.
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