Ever since Hurricane Katrina left thousands of homeowners stuck in the middle of disputes about what combination of hurricane wind and rising flood waters damaged their homes, many have wondered whether there's a better way.

U.S. Rep. Gene Taylor of Mississippi came up with a proposal that would have allowed the National Flood Insurance Program to sell both wind and flood coverage, thus avoiding the problem of having homeowners try to piece together coverage from separate homeowners and flood policies. But that measure failed in the Senate on Wednesday after a Government Accountability Office analysis revealed a host of problems with the proposal.

But Adam Scales, an associate professor at the Washington and Lee School of Law in Virginia, has a different twist on how homeowners can get all the coverage they need in one place.

Rather than having homeowners buy two policies -- a flood policy from the government and coverage for fire, theft, liability and wind from a private insurance company -- Scales advocates making companies sell policies that would provide all the coverage people need and having the government reimburse the companies for flood claims.

The idea is that changing the flood program from a retail venture to a reinsurance program operating behind the scenes would allow consumers to collect one insurance check and start rebuilding their homes and the broader economy while leaving any disputes for the companies and the government to resolve. Mandatory coverage would also solve the problem of not enough people having flood insurance, and would put the program on better financial footing.

"It would push disputes up one level to the wholesale level. Now you would have an argument, say, between State Farm and the federal government about how to deal with the aggregate loss," said Scales, who began studying the flood program after watching New Orleans fill up with water on television. "It clearly makes the wind-water distinction meaningless to the average consumer."

Under Scales' plan, everyone would be required to have flood coverage on their insurance policies, but it would be pricey for people who live in flood-prone places like New Orleans or near a river, and just a few dollars for those whose homes risked flooding only in freak circumstances. Companies would collect the premiums, and then would buy a flood reinsurance policy from the government that would cover most of their losses. Eventually, companies might even sell catastrophe bonds in private markets to cover their flood risk.

His proposal would phase out flood insurance subsidies on older homes over the next 15 years so that wealthy people wouldn't benefit, but the government could help low-income homeowners who couldn't afford the higher prices. To have true risk-based pricing, the government would have to update the floodplain maps. Scales then suggests turning the maps over to the insurance industry to maintain, since they would have a financial interest in keeping them up to date because they'd be on the hook for a portion of the flood claims before the flood reinsurance kicked in.

Don Griffin, vice president of personal lines at the Property Casualty Insurers Association of America, said Scales' basic idea of creating an all-risk policy has been part of discussions at the National Association of Insurance Commissioners on how to better protect the nation from calamities for the past few years.

But Griffin said insurers would need assurances that they would actually get repaid for flood coverage so they're not stuck with the bills. "It's a possibility. Right now, the mechanisms that are in place don't work that well together," Griffin said. "The problem is if we wrote a check thinking that we would be reimbursed and we weren't."

Griffin also noted that the plan might face opposition from state insurance commissioners, who might look at efforts to make a federal program a mandatory part of insurance policies as an attempt to usurp their authority.

"How would the states react?" Griffin said. "On the surface, it makes some sense, but just like the GAO said about putting some wind in the flood program, there are some significant logistical challenges to make it happen."

Before the flood program was created, said Bob Hunter, director of insurance at the Consumer Federation of America, the National Academy of Sciences did a seven-year study about actuarial rates, hydrology, topography, land use, development, mapping and insurance. Significantly changing the flood program would require similarly extensive research.

"You need more than just a concept," Hunter said. "If I was starting with a clean slate, there's a lot of things that I'd do differently. It's not as simple as just saying, 'I'd like to have an all-risk policy.' "

Scales' idea won't make a difference in this round of congressional debate about reauthorizing the flood program through 2013, but he said he wants to float his idea for public debate. "I plan to mail it out to Congress in the next week or so," he said.

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