The total insurance claims from the floods that ravaged the UK in June and July could top £5bn, industry experts have predicted.

While official estimates of the insured losses from both last month’s floods in Yorkshire and the flooding over the weekend, were more conservative at between £2bn and £3bn, industry sources have put the figure at potentially double that.

A senior underwriter at a major UK insurer told Insurance Times that the claims bill for the Yorkshire floods alone could be £3bn. The ABI estimates that flooding in the north of England could cost insurers £1.5bn.

Initial estimates from the flooding in southern England and the Midlands suggest a comparable if not greater level of damage. With some areas – most notably Gloucester – still unreachable, and the possibility of further flooding in the Thames Valley region, the claims bill is set to escalate further.

Lis Gibson, insurance partner at Deloitte, said: “This week’s floods could cost up to £5bn – but not all property will be insured.”

Darren Coombes, partner at loss adjustor Davies, said the latest floods, due to their location in more affluent regions, represented a similar financial threat to those in Yorkshire. “Less properties have been affected, but they are typically of higher value,” he said.

The ABI, however, said this week’s flooding would add approximately £1bn to its initial estimates, bringing the total predicted insurance claims to £2bn.

Rating agency Fitch suggested a total bill of £3bn, taking into account the late reporting of claims, and claims relating to motor vehicle damage and business interruption.

David Stephenson, associate director in Fitch's Insurance Group, said: "Despite the severity of the recent flooding and the wide area affected, it is not a catastrophe of the magnitude that could impair insurers' capital strength, although it is likely to have a negative impact on earnings.”

Meanwhile, there were warnings that the sudden surge in demand for contractors would lead to further escalation in costs for labour and materials.

The Federation of Master builders said that given the “freakish” level of the floods, there was a skills shortage in the market, which would impact on costs.

Gibson said: “Demand surge seems inevitable, and many affected homeowners may find themselves struggling to find available workers for repairs, even at inflated prices,”

Phil Butterworth, senior delivery manager GAB Robins’ added: “While there is still good turnaround and some capacity, there could potentially be an issue building up in the next few days.”

He added that resources were being diverted from Yorkshire to the new localities.

A spokesperson for Homeserve said: “We have received a disproportionate number of claims from some insurers, which suggests that other contractors on their panel are saturated.”

But insurers have played down the impact of demand surge on their supply chain, and maintained that they had adequate capacity to handle the crisis.