The Flood Insurance requirements apply when a property securing a loan is located in a Special Flood Hazard Area (Zone A or Zone V). There are a few exceptions to these requirements, but not many. One of those is the detached-structure exemption. This basically says that a financial institution does not have to require flood insurance on certain structures that meet the definition of a “detached structure” and that does not serve as a residence. There are also rules that come into play for detached garages; however, this is more of an NFIP policy provision rather than an exception.
Jerod explains the detached garage provision in the video.
Video Highlights:
- NFIP Dwelling Policies include an automatic provision that covers a detached garage without the need for separate coverage.
- This provision allows up to 10% of the primary policy's coverage value to be reallocated towards the detached garage.
- The detached garage must not be used as a residence or for business/farming purposes to be eligible.
Published
2023/05/23
