The Association of British Insurers (ABI) has warned homeowners that an agreement between the insurance industry and customers to cover homes at risk from flooding is far from certain.

Currently the insurance industry agrees to cover people whose homes are at risk from flooding, as long as the government continues to invest in flood defence systems.

However Nick Starling, director of general insurance and health at ABI, revealed that a renewal of the agreement is "not by any means a done deal" with insurers concerned following last years floods, which are expected to cost them around £3 billion.

Mr Starling told the Financial Times: "If it is going to be reviewed, it has got to be reviewed on the right basis. There is a lot at stake."

The agreement between insurers and the government is reviewed on an annual basis and also includes cover for small businesses at risk.

According to the ABI, over two million homes in the UK are at risk from flooding.

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