FLOOD victims on Teesside have hit out at a decision by an Internet insurance company to refuse cover to properties in flood-hit areas.

The company, Esure, announced the move this week, claiming it will cut costs for millions of householders by not accepting policies for flood-risk homes.

Industry analysts are predicting Esure's move could set a precedent to be followed by other major insurance companies.

Twice in the space of six months, residents of Skinningrove, east Cleveland, saw their homes devastated by floodwaters.

In June 2000, and again in November the same year, sewage and water flooded into their homes.

Residents in Loftus, Carlin How, Brotton and Guisborough were also left counting the cost of 2000's floods.

Yesterday, Redcar and Cleveland Council leader Councillor David Walsh criticised the decision.

He said: "This will be disturbing news for many householders in Redcar and Cleveland.

"As well as the well-publicised flooding we suffered in Skinningrove and Loftus, there are other low-lying parts of the borough which have also endured minor floods.

"The fact that these are now recorded could mean house insurance may be more difficult to obtain or at a much higher price.

"I think this is simply wrong. Insurance companies are there to insure goods and properties against assessed risks.

"The circumstances around that risk should not be a deciding factor.

"I am now sending a letter to the Local Government Association urging them to take the matter up with the Department of Trade and Industry and the Financial Services Authority."

Andrea Smith, from Carlin How, whose house suffered flood damage, felt the decision penalised people for living on flood plains.

She said: "We feel like we're being victimised. It's not our fault.

"Worryingly, other insurance firms might follow them."

Adrian Webb, head of communications at Surrey-based Esure, said the company had never had any home insurance customers anyway.

He said: "We have always provided motor insurance, but decided to move into home insurance as well.

"Any company can decide who their new customers can be. There are 200 insurance companies to chose from in the UK, and many of them have been refusing cover for flood victims for some time.

"The only difference is, we have come out in the open and said it."