Nationwide Insurance is proposing the creation of Enhanced Homeowners Insurance Policy, a new homeowners insurance offering that would avoid disputes over wind/water issues for policyholders across the US.

Authorized and regulated by the federal government, the proposed Enhanced Homeowners Insurance Policy would combine the wind insurance coverage of a traditional homeowner policy with flood insurance coverage similar to that now offered by the National Flood Insurance Program into one home insurance policy.

Under the proposed coverage, the private insurance market would bear the primary responsibility of paying claims, with the federal government acting as a reinsurer and regulator.

The Enhanced Homeowners Insurance Policy would fold flood coverage into a new, augmented homeowners policy that insurers can voluntarily sell and homeowners can voluntarily purchase. Neither would be mandatory. The enhanced policy would be regulated by the US Treasury Department, which would also reinsure the flood portion to make sure that coverage was financially feasible.

The new enhanced policy would be an additional option for customers to consider as they make key decisions to protect their home. Existing coverage options would also be available. Consumers would still be able to purchase a policy that does not cover flood damage, or a stand-alone policy from the federal flood program.

Jerry Jurgensen, CEO of Nationwide Insurance, said: This solution will need the support of the federal government to be implemented. For the benefit of all, Congress should begin the process to make this new coverage option available as quickly as possible.