Q: I understand that an existing flood policy will cover a detached garage up to 10% of the dwelling policy. Would this also apply to a shed, storage building or barn where a detached garage does not exist? The bank indicates that it has been getting pushback from insurance agents who say that a shed is also covered when there is no garage. And this individual indicates that they’ve seen some language that defines a detached garage as having car storage. Is there any written guidance on this issue that you could point the bank to?
A: An existing flood policy will not cover a shed, storage building or barn where a detached garage does not exist. Please refer to NFIP Q&A #38 (pasted below) which states that coverage on the Dwelling Form would not include carports, tool and storage sheds and the like.
38. How many buildings or locations (and their contents) may be insured on each policy? Normally, only one building and its contents can be insured on each policy. The Dwelling Form of the Standard Flood Insurance Policy does provide coverage for up to 10 percent of policy amount for appurtenant detached garages but not for carports, tool and storage sheds, and the like. In addition, the Scheduled Building Policy is available to cover 2 to 10 buildings. The policy requires a specific amount of insurance to be designated for each building, and all buildings must have the same ownership and the same location.
– This Q&A was included in the materials from the FDIC New York Region Regulatory Teleconference: “Flood Insurance – Flood Insurance Compliance and an Examiner’s Perspective” which took place on December 3, 2012. These materials may be found here: https://www.fdic.gov/news/conferences/NY/2012-12-03.html