A plan to help 200,000 homes get affordable flood insurance was on the verge of collapse today, as storms continue to batter England and Wales, creating mayhem for households.

The plan could add £10 a year to premiums for the 200,000 homes most prone to flooding, but would save vulnerable households from much steeper rises. However, insurers have accused the Government of ignoring these plans.

Also see the Flooding victim tips MSE News story if you've been a victim of the heavy downpours.

The Association of British Insurers (ABI) trade body has proposed a fund be set up to pay out victims. This would be financed by an £8-£10 rise in premiums for at-risk homes.

But in order to keep the premium rise low, the ABI wants the Government to share the cost of larger claims in the early years, before the fund has grown in size. The fund would then pay the Government back over time.

Without that commitment, premiums could rocket as insurers simply wouldn't be able to afford to pay out large claims, they insist.

But the ABI claims the Government has refused to consider providing a temporary overdraft facility.

'Vital to work together'

An agreement which forcing insurers to keep costs in check for vulnerable homes, in return for the Government maintaining adequate flood defences in those areas, comes to an end in June 2013.

Nick Starling, director of general insurance at the ABI, says: "The severe floods experienced by many areas this year are a reminder of the rising flood risk facing the UK.

"It is therefore vital insurers and Government tackle this issue together. No country in the world has a free market for flood insurance with high levels of affordable cover without some form of Government involvement."

But a spokeswoman for Department for Environment, Food and Rural Affairs says: "The future of flood insurance is a priority for us and is being considered at the highest level. However, it is not our policy to conduct negotiations in public."

Huge floods

The ABI's announcement comes at a time when the UK is facing devastating floods.

The Environment Agency today says around 900 homes have been affected by flooding since Wednesday, with south-west England and the Midlands being the worst-hit areas.

So far, three people have been killed.

One in six homes in the UK is at risk of flooding and around 500,000 homes is at a 'significant' risk, the Environment Agency adds.

Protect your home from flooding

If you've been affected by the current floods and need to make a claim, you typically have 180 days to do so, but it's always best to act as swiftly as possible. For full help, see our Flooding victim tips MSE News story.

Here are some tips for those who live in flood-prone areas:

  • Ensure drains and gutters are clear of debris, so rainfall can drain away.
  • Place valuable and electrical items in high cupboards or on high floors to prevent damage.
  • Ensure outdoor furniture and other items likely to float away are safely restrained.
  • Store important documents in a watertight bag in a dry accessible place, preferably high up.
  • Make a list of useful numbers you may need – such as your insurer, local council, emergency services and Floodline (0845 988 1188).
  • Buy air brick covers or flood boards to block doorways.

Have you have been a victim of flooding and struggled to get affordable insurance, or any cover at all? If so, please email news@moneysavingexpert.com with your story.