Eligible or Ineligible for NFIP Coverage?

Did you know NFIP policies may be written only on buildings that have two or more outside rigid walls and a fully secured roof and that are affixed to a permanent site? In addition, buildings must be able to resist flotation, collapse, and lateral movement. At least 51 percent of the actual cash value of the building, including machinery and equipment that are part of the structure, must be above ground level. The only exception to this requirement is if the lowest level of the building is at or above the Base Flood Elevation and it is below ground only because earth has been used as insulation material in conjunction with energy-efficient building techniques.

The issue of building eligibility for flood insurance coverage was a hot item in the Claims Town Hall at the 2007 National Flood Conference. Questions were raised about eligibility of sheds, buildings under construction, and temporary storage pods.

Most buildings are eligible for NFIP insurance if they are located in a community that participates in the NFIP and if they have been constructed in compliance with the community building requirements.

However, buildings are not eligible for NFIP coverage under a number of conditions.

Coverage may not be available for buildings constructed or altered in any way that violates the State or local floodplain management laws, regulations, or ordinances. Contents and personal property contained in these buildings are ineligible for coverage. Section 1316 of the National Flood Insurance Act of 1968 allows the States to declare a structure in violation of a law, regulation, or ordinance. Flood insurance is not available for properties placed on the 1316 Property List. Insurance availability is restored when the violation is corrected and the 1316 Declaration has been rescinded.

Container-type buildings such as gas and liquid tanks, chemical or reactor container tanks or enclosures, brick kilns, and similar units, and their contents are ineligible for coverage.

Buildings newly constructed or substantially improved on or after October 1, 1982, and located entirely in, on, or over water or seaward of mean high tide are ineligible for coverage.

If 50 percent or more of the actual cash value of the building (including the machinery and equipment that are part of the building) is below ground level, the building or units and its contents are ineligible for coverage (with the exception noted above).

Examples of Ineligible Risks

Some specific examples of ineligible risks are provided below. Refer to the Standard Flood Insurance Policy for a definitive listing of property not covered.

Building Coverage

1. Boat Repair Dock
2. Boat Storage Over Water
3. Boathouses
4. Camper
5. Cooperative Unit Within Cooperative Building
6. Decks (except for steps and landing; maximum landing area is 16 sq. ft.)
7. Drive-In Bank Teller Unit (located outside walls of building)
8. Fuel Pump
9. Gazebo (unless it qualifies as a building)
10. Greenhouse (unless it has at least two rigid walls and a roof)
11. Hot tub or spa (unless it is installed as a bathroom fixture)
12. Open Stadium
13. Pavilion (unless it qualifies as a building)
14. Pole Barn (unless it qualifies as a building)
15. Pumping Station (unless it qualifies as a building)
16. Storage Tank--Gasoline, Water, Chemicals, Sugar, etc.
17. Swimming Pool Bubble
18. Swimming Pool (indoor or outdoor)
19. Tennis Bubble
20. Tent
21. Time Sharing Unit Within Multi-Unit Building
22. Travel Trailer (unless converted to a permanent onsite building)
23. Water Treatment Plant (unless 51 percent of its actual cash value is above ground)

Contents Coverage

1. Automobiles—Including Dealer's Stock (assembled or not)
2. Bailee's Customer Goods—Including garment contractors, cleaners, shoe repair shops, processors of goods belonging to others, and similar risks
3. Contents Located in a Structure Not Eligible for Building Coverage
4. Contents Located in a Building Not Fully Walled and/or Contents Not Secured Against Flotation
5. Motorcycles—Including Dealer's Stock (assembled or not)
6. Motorized Equipment—Including Dealer's Stock (assembled or not)

These eligibility clarifications pertain only to the Dwelling Form of the Standard Flood Insurance Policy. For more information about eligibility for flood insurance coverage, see the General Rules section of the NFIP Flood Insurance Manual.