Insurers have warned that government spending on flood defences is too little and that they may not insure home owners in at risk areas against flood damage. If insurance firms decide not to cover high risk areas from flood damage, 570,000 properties could be left susceptible to loss if they were hit by further flooding.
The Government's latest spending review announced it would spend just £2.15bn on flood defences, which is not enough according to the Association of British Insurers and they have warned that much more is required.
Stephen Haddrill, director general of the ABI, said: 'Government spending for the next three years is less than we were asking for, even before the floods.' and said the spending plan shows that Chancellor Alistair Darling has 'completely failed to grasp the importance of improving Britain's flood defences'.
The ABI had urged the government to spend £2.25bn over 3 years, but it believes that there is a need for more investment. Insurers have so far spent £3bn putting right the damage caused by this year's floods.
An ABI spokesman said: 'We have committed to continue to provide cover for households in high risk areas, but we will now have to review this.'
Norwich Union, the UK's largest insurer, warned in August that its premiums for homes with increased risk of flooding would be hiked by 10%.
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