If the government doesn't act soon to sort out the country's flood defences there is a chance people in flood-prone areas will no longer be able to insure their homes, warns AA Insurance.
The insurance industry is becoming concerned at the increasing number of claims resulting from the growing frequency of extreme weather, in particular flooding.
At present there is an agreement between the government and the insurance industry - the so-called 'Statement of Principles' - that ensures flood-prone homes can continue to be insured. But this agreement ends on 1 July 2013 and it's not clear that it will be renewed.
"Some insurers are telling us that flood-prone homeowners might not be able to renew their cover later this year, because their new policy will extend beyond 1 July 2013: with all the implications for property value and mortgage availability that this implies," says Simon Douglas, director of broker AA Insurance.
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Yet despite these concerns, a powerful group of MPs have stated that the government is not doing enough to bolster the country's flood defences and deal with the growing problem of flooding.
"The annual cost of flood damage is at least £1.1 billion and ageing defences and climate change will increase that bill," says Margaret Hodge, the Public Accounts Committee (PAC) spokesperson. "So flood protection is a national priority. The Department of Environment, Food and Rural Affairs (Defra) sees more funding coming from local sources [but] we are sceptical this will be possible when local authorities and businesses are themselves under financial pressure."
Douglas says: "People want the government to take decisive action now, to ensure that their homes are protected. But that's not happening with the Environment Agency's budget cut by 10%.
What's more, Defra is seeking an increased contribution of more than 300% from local resources to tackle flood protection issues, when local government budgets have been severely cut too."
"The PAC has hit the nail on the head," says Charles Tucker, chair of the National Flood Forum. "The money just isn't there – either from government or from local sources. The government is flying on a wing and a prayer – hoping against hope that the big floods keep off until national finances improve – and gambling with the future of thousands of communities."
Douglas adds: "The PAC has come up with a range of sensible recommendations, which much be acted upon now. Homeowners expect the government to take a lead on this issue: they need some reassurance that they won't be left unprotected."