Some 800 homes have been flooded in the latest storms to hit Britain
Insurance companies are warning that a lack of progress in talks with the government could leave 200,000 homes without cover against flood damage.
The Association Of British Insurers is discussing how to provide affordable premiums in high-risk areas.
But the Times reports the talks are on “the brink of collapse” because the government is refusing to guarantee an overdraft if funds run out.
The Department for Environment insisted it wanted to reach a deal.
The agreement with insurers, reached in 2008, obliges insurers to provide cover for high-risk properties while the government continues to improve flood defences.
Discussions have been taking place for months to try to make sure the arrangement continues after June 2013.
It comes as the Environment Agency says some 800 homes have been flooded in the latest storms to hit the UK.
Deadlocked
The ABI wants the government to share the risk for the areas with the most homes at significant flood risk – defined as a greater than one in 75 chance of flooding in any given year.
The Times says the industry had hoped to reach a deal soon which would see householders pay an extra £8 to £10 on top of their premiums which would go into a £100m pool used by insurers to cover flood affecting their homes.
But the paper says the talks are deadlocked because ministers have not agreed to a temporary, interest-free, overdraft for the industry, to help it meet the cost of emergencies in the first few years of the scheme while the fund builds up.
A Defra spokesman said they would be very disappointed if the talks broke down “because our door is always open for further discussions”.
“We want to go further than the statement of principles to reach an agreement that ensures both the availability and the affordability of flood insurance for the first time,” he said.
“The insurance industry and the government continue to work together towards this goal.
“We are considering a number of options to ensure that home insurance continues to be widely available and affordable in areas of flood risk.”
Flood cover talks 'reach crisis' http://news.bbcimg.co.uk/media/images/64376000/jpg/_64376308_64376026.jpg
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