This is a continuation of a question I had that has since fallen off the first page so I thought it warranted a new thread. Has anyone had any experience with the difference between dual interest and single interest flood policies? My understanding is that NFIP policies are dual interest policies in that they protect the interest of the borrower and the lender. Single interest policies only protect the interest of the lender and most force placed policies are single interest. The problem I've run into is that we have a 2nd lien that we need to force place flood insurance on. The first lien holder also force placed their policy and refuses to add us a 2nd mortgagee. Our regulator advised us that there can only be one flood policy per property, however I have received guidance from another compliance source that our regulator is incorrect and that you can only have one NFIP policy per property as they are dual interest, but you can have multiple single interest (force placed) policies as they aren't duplicative if they only cover the lender's interest. Long story short I think that we should force place for the amount of our loan in 2nd position thus having 2 force placed flood policies on the same property. Any thoughts?

First of all, your force placed policies must cover the borrower as well as the bank.

Secondly, when you need an "second policy" it will have to be a private policy.

So would you force place a flood policy for your second lien then? I thought the same thing and we contacted the insurance company of the first to add us a 2nd mortgagee and they refused. At the same time our regulator indicated to us that you cannot have more than one flood policy on a property so we are stuck in the middle here. I recently attended a flood seminar and in between sessions asked the presenter about this situation. His advice was that our regulator was incorrect and that you can have two force placed policies on the same property due to the nature of the insurance (that's where my whole single interest vs. dual interest question above came from).

You cannot have two NFIP policies on the same property.

Your original thread from 2/25 goes into this in detail. The key comment is this:

"Yes. You would have to request them to increase it to cover your loan and add you as junior lien holder. You would fund the additional premium, recouping it from the borrower by charging it to their loan."

Some way, some how, you need the required insurance, and the insurance you force place must cover the borrower as well as the bank.

Thanks and I agree with you. You cannot have two NFIP policies on the same property. The problem I'm running into is this notion that force placed policies are not NFIP policies and therefore the holder in first position will not add us to their lender placed policy. As such is it OK to force place a second policy on the property?

OK thanks for the link.