Insurance companies' threat to withdraw insurance for homeowners living in areas at risk from flooding could lead to a "two-tier" society, it has been claimed.

Debra Williams, managing director of Confused.com, says that the government's lack of focus on flood defences could end up leaving many house insurance customers in the lurch.

"The government's failure to invest further in flood protection could perversely leave homeowners 'high and dry' without sufficient flooding cover from their existing insurer," she commented.

"We've already seen insurance companies reassess what they consider to be flood-prone areas by increasing premiums, however without significant investment from the government, the insurance industry could potentially refuse to insure homeowners in high-risk areas.

"While this is potentially desperate news for the owners of up to 2.2 million* properties currently residing in flood prone areas, the flip-side could be lower premiums for people living in 'dry' areas, as those insurers free from the burden of flood claims, reflect this in more competitive pricing.

"This raises the prospect of a two tier insurance society: those with affordable insurance in low-risk areas, compared to those with insufficient cover or cover at exorbitant levels. In line with the rest of the insurance industry, we hope the government will backtrack on its position by investing more heavily in flood defences, thereby removing this potential scenario."

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