This is probably a really dumb question, but is there any problem with having a policy in place that exceeds the maximum amount of flood insurance available under the NFIP?

For example, we have a 2nd mtg with a loan amount of $15,000, the 1st mtg is $45,000, the appraisal is $95,000 (land and improvements, without a value for improvements broken out), but insurance coverage is $115,000.

Assuming the policy amount was chosen by the borrower and not mandated by the lender, could the lender have any potential liability (regulatory or otherwise) for the excess insurance?

I'm at a loss as to how the insurer was able to write coverage for more than the value of the property. Is a portion of the insurance coverage applicable to contents?

I don't think that the lender has any liability if they did not require the excess coverage.

I think you're okay with that insurance amount- my guess is that the insurance is based on the replacement cost (similar to the hazard insurance).