Householders are being denied flood insurance cover or quoted hugely inflated prices because of delays by the government and insurers in reaching a new deal on affordable cover, the Local Government Association said today.
The current Flood Insurance Statement of Principles between the Association of British Insurers and government which provides a 'safety net' guaranteeing cover to homes at risk of flooding expires in June 2013.
According to the LGA, the longer government and the insurance industry stall on agreeing a deal to succeed this, the more likely households are to be denied cover - exposing them to the risk of losing their homes in the event of severe flooding.
Councils have already reported problems faced by householders trying to renew their insurance in the past few weeks and are now concerned that high-risk areas could effectively become blacklisted by insurers.
Councillor Clyde Loakes, vice chair of the LGA's environment board, said: 'The extreme weather we have seen over the past few weeks is a stark reminder of the importance of flood insurance.
'It is absolutely vital that government and the insurance industry come to a new deal on providing affordable cover as a matter of urgency. Households are now being refused cover and left exposed to the risks of damage and destruction.'
He added: 'A new agreement should have been sorted long before now and the continuing delays are having a very real and severe impact on thousands of people who will be exposed to the risk of losing their homes if they are unable to find insurance.
One local authority in the north west of England said that, when it was hit by floods earlier this month, an estimated 100 out of 800 homes affected were without insurance.
Councils also know of people in areas including Nottinghamshire, Worcestershire, Devon, Kent and Huddersfield who have been refused or priced out of home insurance because of flood risk.
Nick Starling, director of general insurance at the ABI, said insurers remained committed to finding a replacement for the Statement of Principles agreement.
'We are currently at an advanced stage in our discussions with government. Insurers continue to cover for flooding as a standard part of UK home and small business insurance,' he said.