The government is seeking talks with the insurance industry to try to prevent huge household premium increases in areas at high risk of flooding.

Elliot Morley, countryside minister, told the House of Commons that the government would discuss with insurance companies how the industry could respond more quickly and effectively to emergencies such as these.

“The talks will deal with problems of insurability for homes and businesses at risk of flooding,” he said.

Association of British Insurers (ABI) spokesman Vic Rance said: “We want to be able to provide flood cover to people at prices they can afford but this depends partly on flood defences being adequate and the government controlling housing development in flood plains.”

Rating agency Standard & Poor's (S&P) warns that damages caused by the severe floods could reach up to £2bn.

This figure conflicts with the latest estimate from the ABI which claims flood damage losses will cost only £500m.

Corinne Cunningham, S&P director of insurance ratings, said claims costs were likely to continue to rise the longer the floods lasted.

She said that “because of increased housing density and the higher value of properties, insurers will be looking to match the £1.4bn bill from the 1987 hurricane”.

And she stressed that while claims from physical damage were likely to plateau, business interruption losses could rise further.

Cunningham said insurers with significant client interests in flood prone areas and insufficient reinsurance cover could be hit the hardest.

“Those insurers with specific exposure in areas that have suffered repeated flood damage over the last few weeks could face significant losses,” she said.

The storms have also coincided with the start of the annual renewal of insurers' reinsurance premiums.

And Cunningham believes reinsurers could use this as a reason for increasing rates.

She said: “Reinsurers are likely to argue that the frequency of winter storms in the UK is increasing. The recent losses will merely add fuel to the fire.”

Loss adjuster Crawford's said it had the capability to draft in additional teams from outside the UK to deal with flood damage should the work reach saturation point.