As you observed, the Biggert-Waters Flood Insurance Reform Act of 2012 amended the Flood Disaster Protection Act of 1973 to allow the cost of force-placed flood insurance to include “premiums or fees incurred for coverage beginning on the date on which flood insurance coverage lapsed or did not provide a sufficient coverage amount.” 42 USC 4012a(e)(2) (emphasis in bold added). Among other changes, that law also clarifies the timeline for terminating force-placed flood insurance. 42 USC 4012a(e)(3). Both of these changes went into effect when the law was enacted on July 6, 2012. See FDIC FIL-14-2013, Interagency Statement on the Impact of Biggert-Waters Act (March 29, 2013).

With these changes, the timeline for a force-placed flood insurance policy might look something like this:

January 1: Lender’s determination (any time during term of loan)

• Lender determines that a building securing the loan is not covered by flood insurance (or that the flood insurance is insufficient)

January 1: Borrower notification

• Lender notifies the borrower that the borrower should obtain, at the borrower’s expense, sufficient flood insurance for the term of the loan

February 15: Force-placed insurance (within 45 days of determination)

• Forty-five days have passed since lender’s notification. If the borrower has not obtained sufficient flood insurance, the lender must purchase the insurance on behalf of the borrower and may charge the borrower for the cost of premiums and fees incurred by the lender in purchasing the insurance, including premiums or fees incurred for coverage beginning on the date on which flood insurance coverage lapsed or did not provide a sufficient coverage amount.

March 1: Confirmation of borrower’s insurance (any time)

• Lender receives confirmation of a borrower’s existing flood insurance coverage (an insurance policy declarations page that includes the existing flood insurance policy number and the identity of, and contact information for, the insurance company or agent).

March 31: Termination of force-placed insurance (within 30 days of confirmation)

• Thirty days have passed since the lender received the borrower’s flood insurance confirmation. The lender must terminate the force-placed insurance and refund to the borrower all premiums and related fees paid by the borrower for any force-placed insurance during any period when both the borrower’s policy and the lender’s policy were in effect.