HOMEOWNERS face massive increases in insurance in the wake of the New Year flooding which washed out houses in low-lying areas of the Thames Valley.

The Environment Agency this week refused to accept responsibility for the damage, which leaves compensation claims solely in the hands of the insurance companies.

A man from Cookham, who did not want to be named, said flooded residents did not want to press with claims for fear of insurance premium hikes.

He added: "It is in our interests to keep this low key because we do not want our premiums to go up."

David Sumpter, of Thomas Winter insurance brokers, in Chapel Street, Marlow, said: "The worst case scenario is that insurers refuse to insure houses within a certain postcode because of the flood risk.

"If a property has been flooded for the last five years, there becomes a point when the insurance company has to say 'is it worth it?'."

Stuart Leitch, of commercial insurance specialist Stuart & Stuart in Beaconsfield, said premiums are based on the number of claims from a particular area.

He added: "It has become more scientific and we are now able to do street by street surveys."

Insurance company Norwich Union has designed a map so it can tell which areas are liable to flood and can adjust its home insurance premiums accordingly.

Mr Leitch said: "It wouldn't make any difference to the premium now but if they can monitor the claims for floods in the past, they can pre-empt future claims.

"The best advice we would give to flooded householders is to stick with the same insurance company for as long as possible. Most insurers are quite honourable and would continue to insure your home."

January 24, 2003 12:00