COLUMBUS, Ohio - (Business Wire)
Nationwide Insurance is proposing the creation of an innovative, consumer-friendly homeowners insurance offering that would avoid disputes over
“wind/water
” issues for policyholders across the country.
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.
“Americans need not suffer through a catastrophic event lacking the comprehensive insurance coverage they need,” said Jerry Jurgensen, Nationwide CEO. “If Hurricane Katrina taught us anything, it is that the market needs a home insurance product that covers flooding as well as wind damage in one policy.”
If authorized by Congress, those who purchase the new home insurance product would be assured that no matter how their home may be damaged, coverage for wind and water would be available in one policy.
Following Hurricane Katrina in 2005, thousands of lawsuits were filed against insurance companies challenging long-held homeowner policy provisions that exclude flood damage as a covered loss. Even though the courts have upheld the flood exclusion provisions as legal, Nationwide engaged in conversations with a variety of stakeholders to find a market-driven solution to the “flood/wind” problem and to propose a product that would meet customer needs.
“This solution will need the support of the federal government to be implemented,” Jurgensen said. “For the benefit of all, Congress should begin the process to make this new coverage option available as quickly as possible.”
The enhanced homeowner 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 U.S. Treasury Department, which would also reinsure the flood portion to make sure that coverage was financially feasible.
The enhanced policy would be an option that would increase both customer choice and customer confidence.
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. However, for homeowners who desire comprehensive coverage in one policy, this policy would provide it for them.
Nationwide continues to support an open dialogue with policymakers to develop market-driven solutions that will give customers, carriers and regulators greater peace of mind when the next storm strikes.
Nationwide, based in Columbus, Ohio, is one of the largest diversified insurance and financial services organizations in the world. Nationwide ranks #108 on the Fortune 500 list. The company provides a full range of insurance and financial services, including auto insurance, motorcycle insurance, boat insurance, home insurance, life insurance, farm insurance, commercial insurance, and financial services. For more information, visit www.nationwide.com.
Nationwide, the Nationwide Framemark and On Your Side are federally registered service marks of Nationwide Mutual Insurance Company.
Nationwide
Joe Case, 614-249-6353
casej6@nationwide.com
