If the insurance companies suffer huge losses we will see cover withdran and the growth of fllod ghettos in our towns and cities...often at the very heat of them where they were first established centuries ago. This will massively damage values and the ability to buy and sell property

This means that we will see the establishment of Flood ghettos where no one can get cover

A few years back the ABI and its members agreed to continue insuring flood risk property (residential and commercial). This agreement runs out in 2013 and is not going to be renewed. The consequence of this will be that many (majority?) of insurers will no longer offer flood insurance as part of home risk policies. This is going to have a huge impact on the property market with the ongoing flood insurance being a USP for marketing properties and those that can't getting it leading to the flood ghetto situation quite rightly pointed out by Jolly GG.

I was in an Essex coastal town the other day and its entire regeneration is being hampered by the fact that most of the depravation and areas designated for investment is category 3a flood risk!

Three years ago large parts of the country, particularly Yorkshire, were in the middle of vast clean up operations following some of the worse floods ever. Now we are having one of the driest starts to the year on record and there is talk of reservoirs running dry, hosepipe bans etc. Continued dry spells will lead to the moisture content of underlying rocks (clays) reducing and the possibility of ground movement. The climate is becoming so unpredictable and extreme that insurers will have to change their policies to cover all of this or not offer insurance at all. It is imperative to to find out the potential susceptibility a property has to these issues before investing.