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When can the money be disbursed after it has been escrowed?
The municipality must immediately forward the policy proceeds, except any interest earned while in escrow, to the insured or to the service contractor as outlined below upon reasonable proof (defined in Sections 2845(5) & 2227(5)) of one of the following:
- The damaged or destroyed structure has been repaired or replaced except to the extent that the amount withheld is needed to complete the repairs.
- The damaged or destroyed structure has been removed and completely cleared in compliance with local code requirements.
- The insured may seek resolution with the municipality or seek relief in circuit court if they feel the municipality has not properly disbursed the funds. (Sections 2227(2)(d) & 2845(2)(d))
The insured may seek resolution with the municipality or seek relief in circuit court if they feel the municipality has not properly disbursed the funds. (Sections 2227(2)(d) & 2845(2)(d)).
If reasonable proof is not presented to the municipality within 120 days after receiving the portion of policy proceeds, the municipality may use the retained proceeds to secure, repair, or demolish the damaged or destroyed structure and clear the insured property so it complies with local code requirements. Any unused portion of the retained proceeds shall be returned to the insured. The municipality may extend the 120 day time period.