Outbuilding Question

Posted By: HRH Okie Banker

Outbuilding Question - 06/18/19 04:27 PM

Outstanding loan amount is $18,000. Appraisal is $35,000. Building coverage on insurance comes in for $6,800, when previous policy was $35,200. Appraisal shows detached garage and two add'l outbuilding. We've done some research but just aren't sure. Besides having to have the policy amount increased do we have to have separate policies for the two outbuildings? We know the detached garage would be covered under the building policy. Your help is appreciated.
Posted By: rlcarey

Re: Outbuilding Question - 06/18/19 05:35 PM

What are the outbuildings used for? Personal, family, household purposes, any living quarters, etc. Would they not be eligible for the detached structure exemption? We need a lot more information.
Posted By: HRH Okie Banker

Re: Outbuilding Question - 06/18/19 06:12 PM

Residential property - used for not much. Just dilapidated old sheds on the lot. We thought we were limited to one "detached" under the homeowners policy - not the garage and tool shed and she-shed...
Posted By: rlcarey

Re: Outbuilding Question - 06/18/19 06:29 PM

(d) Exemptions. The flood insurance requirement prescribed by paragraph (c) of this section does not apply with respect to:

(3) Any structure that is a part of any residential property but is detached from the primary residential structure of such property and does not serve as a residence. For purposes of this paragraph (d)(3):

(i) "A structure that is a part of a residential property" is a structure used primarily for personal, family, or household purposes, and not used primarily for agricultural, commercial, industrial, or other business purposes;

(ii) A structure is "detached" from the primary residential structure if it is not joined by any structural connection to that structure; and

(iii) "Serve as a residence" shall be based upon the good faith determination of the member bank that the structure is intended for use or actually used as a residence, which generally includes sleeping, bathroom, or kitchen facilities.
Posted By: HRH Okie Banker

Re: Outbuilding Question - 06/18/19 07:00 PM

Thanks.