632.05 Annotation
Sub. (2), the valued policy law, does not provide that an insured is entitled to the limits of all policies insuring a dwelling. Instead, s. 631.43 (1), the pro rata statute, specifically governs situations when two or more policies indemnify against the same loss. Absent the consent of the insurers, insureds are entitled to the full amount of their loss but not to the full amount of both policies if the combined limits exceed the actual loss. Wegner v. West Bend Mutual Insurance Company,
2007 WI App 18,
298 Wis. 2d 420,
728 N.W.2d 30,
05-3193.
632.05 Annotation
Sub. (2) does not exclude real property that is owned and occupied by the insured primarily as a dwelling solely because it is not the insured's primary residence, but to be covered under the statute the property must be "occupied by the insured primarily as a dwelling." Use is the core meaning of occupy in the context of this statute. The building must be used by the insured primarily as a residence. When the primary use of a building for at least 14 months before a fire had been renting it to others, sub. (2) did not apply. Cambier v. Integrity Mutual Insurance Company,
2007 WI App 200,
305 Wis. 2d 337,
738 N.W.2d 181,
06-3112.
632.05 Annotation
Sub. (2) requires the insured building be "occupied by the insured primarily as a dwelling." The insured's use must bear a relationship to actually living in the dwelling. The fact that the building was being renovated and refurbished does not affect its status as a dwelling. Whether or not a person ever slept in a house is not dispositive of whether he or she occupied it. A dwelling does not cease to be occupied as a dwelling if the people living there temporarily vacate the dwelling for renovations or if a purchaser engages in renovations before moving in. Johnson v. Mt. Morris Mutual Insurance Company,
2012 WI App 3,
338 Wis. 2d 327,
809 N.W.2d 53,
10-2468.
632.07
632.07
Prohibiting requiring property insurance in excess of replacement value. A lender may not require a borrower, as a condition of receiving or maintaining a loan secured by real property, to insure the property against risks to improvements on the real property in an amount that exceeds the replacement value or market value of the improvements, whichever is greater.
632.07 History
History: 2007 a. 170.
632.08
632.08
Mortgage clause. A provision for payment to a mortgagee or other owner of a security interest in property may be contained in or added by endorsement to any insurance policy protecting against loss or destruction of or damage to property. If the insurance covers real property, any loss not exceeding $500 shall be paid to the insured mortgagor despite the provision, unless the mortgagee is a named insured.
632.08 History
History: 1975 c. 375;
1979 c. 102.
632.09
632.09
Choice of law. Every insurance against loss or destruction of or damage to property in this state or in the use of or income from property in this state is governed by the law of this state.
632.09 History
History: 1975 c. 375.
632.10(1)
(1) "Building and safety standards" means the requirements of
chs. 101 and
145 and of any rule promulgated by the department of safety and professional services under
ch. 101 or
145, and standards of a 1st class city relating to the health and safety of occupants of buildings.
632.10(2)
(2) "Deliver" means delivery in person, or delivery by deposit with the U.S. postal service of certified or 1st class mail addressed to the recipient at the recipient's last-known address.
632.10(3)
(3) "Final settlement" means the amount that an insurer owes under a property insurance policy to the named insured and other interests named in the policy for loss to any insured building or other structure affixed to land that is caused by fire or explosion, excluding any amount payable for loss to contents or other personal property, for loss of use or business interruption and any amount payable under liability coverage under the policy, and that is determined by any of the following means:
632.10(3)(a)
(a) Acceptance of a proof of loss by the insurer.
632.10(3)(b)
(b) Execution of a release by the named insured.
632.10(3)(c)
(c) Acceptance of an arbitration award by the insurer and named insured.
632.10(3)(d)
(d) Judgment of a court of competent jurisdiction.
632.101(1)(1)
Affected policies. Except as provided in
sub. (2), every property insurance policy issued or delivered in this state, including property insurance policies issued under the mandatory risk-sharing plan operating under
s. 619.01, that insures real property located in a 1st class city against loss caused by fire or explosion shall provide for payment of any final settlement under the policy in the manner described in
ss. 632.102 to
632.104.
632.101(2)
(2) Excluded policies. Sections 632.10 to
632.104 do not apply to property insurance policies issued in any of the following circumstances:
632.101(2)(a)
(a) By the local government property insurance fund under
ch. 605.
632.101(2)(b)
(b) On a one- or 2-family dwelling that is occupied by the named insured as a principal residence, if any of the following is satisfied:
632.101(2)(b)1.
1. The named insured gives proof of occupancy to the insurer by a valid Wisconsin operator's license.
632.101(2)(b)2.
2. If the named insured does not possess a valid Wisconsin operator's license, the named insured gives proof of occupancy to the 1st class city by documentation approved by the 1st class city. Upon acceptance of the proof, the 1st class city shall immediately notify the insurer that a policy issued on the property is exempt from
ss. 632.10 to
632.104.
632.101 History
History: 1989 a. 347;
1991 a. 315.
632.102
632.102
Payment of final settlement. 632.102(1)
(1)
Withholding. An insurer shall withhold from payment a portion of the final settlement as determined under
sub. (2), if all of the following apply:
632.102(1)(a)
(a) The amount of the final settlement exceeds 50% of the total of all limits under all insurance policies covering the building and any other structure affixed to land that sustained the loss.
632.102(1)(b)
(b) The total amount of all insurance covering the building and any other structure affixed to land that sustained the loss is at least $5,000.
632.102(2)
(2) Amount withheld. The insurer shall withhold from payment of the final settlement an amount that is equal to the greater of the following:
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)(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)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)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)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. 66.0413,
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 employee 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.
632.103
632.103
Procedure for payment of withheld funds. 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. 66.0413,
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)(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
ss. 66.0413 and
66.0427 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.
632.104
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.
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.
