Mandatory Flood Coverage on All Buildings?

Answered by:

Question:

We have a loan with collateral located in flood zone A. The collateral includes the principal dwelling, a pump shed, eight grain silos, a dog kennel, a barn, a building previously used as beauty parlor and several other small buildings. If the amount of flood coverage on the home meets or exceeds the loan amount, are we required to have the customer carry flood coverage on the other buildings? Can you give me the publication or legislation and page numbers that would back the yes or no answer?

Answer:

You must have a separate policy on each building located in a SFHA. The instructions to the SFHDF (I know this is a strange place to have this information), under the heading "Other Information" states "A separate flood insurance policy is required for each building or mobile home." On page 29 of the FEMA Guidelines it states: "For multiple buildings, the lender must ensure that a separate flood insurance policy is provided for each building requiring coverage. The NFIP allows one policy per building."

First published on BankersOnline.com 12/08/08