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What is the purpose of the fire insurance withholding program?
The fire insurance withholding program is designed to provide municipalities with some financial protection against the cost of cleaning up a damaged structure following a fire loss. Participating municipalities may be eligible to receive a portion of a policyholder's final settlement to be held in a specified escrow account until the structure is repaired, replaced, or demolished, at which time the escrow funds would be released by the municipality back to the property owner. If the property owner does not repair the structure, the municipality may use the funds to repair, replace, or demolish the damaged structure.