My home owners insurance company was mistakenly paid twice.

This seems to be a full problem and mistake by Bank of America by accidentally setting up the purchased account as an impound. It’s unclear how long this has gone on, but there is a responsibility on your part to have noticed the increased loan paymennt. Having said that, Bank of America needs to work with Allstate about a refund of the duplicate payment. You should follow up with Allstate and/or your agent to be sure it gets returned to the Bank. That is really the only place the refund can go, since it was paid by the bank to the insurance company. 

After the refund is confirmed then Bank of America needs to refund the payment to you, as well as any additional payments made continuing the impound account. They also need to be sure to adjust your monthly payments to the correct amount. You should keep an eye on the payments going forward to be sure this is done.