Based on the prior insurance agent’s manual and related guidance, a detached garage was covered under the flood policy up to a certain amount as long as the structure was not used for commercial purposes or as a residence. Do you know if this is still the case?
Under the current rules, flood insurance is required on each structure that secures a loan that is situated in a SFHA. If the structure is a residential building with 1-4 units covered under a standard dwelling policy, up to 10% of the dwellings coverage may be allocated to the detached garage as long as the garage is not utilized for residential (dwelling), business, or agricultural purposes.
This rule changes effective October 1, 2015 when the new Interagency Flood rules go into effect. At that point a detached structure that is part of a residential property but is detached from the primary residential structure of such property and does not serve as a residence may be exempt as a detached structure. This is defined in the FDIC’s 12 CFR 339. There are definitions in this section in regards to further defining a “residential property”, “detached”, and “residence”.