THOUSANDS of homes hit by floods could be left without insurance cover by early next year, a leading industry body warned yesterday.

Hundreds of houses in the North-East and North Yorkshire have been devastated by floods during the past 18 months, but in a postcode lottery owners could find insurers refusing to cover them for flood damage.

Most flood-hit homes are protected by an agreement with the Association of British Insurers (ABI) and the Government to continue covering properties which are already insured.

But the agreement runs out before the end of this year, causing fears that thousands of home owners may not get cover after then.

Peter Staddon, of the British Insurance Brokers' Association (BIBA), said that, after the end of the year, insurers would probably draw a red line through some postcodes.

"We have seen evidence in the South that it is already happening," he said. "We could have a situation in January 2003 where people will not be able to get cover, and that is of major concern."

There have also been fears about increases in excesses and premiums. One flood-hit householder in North Yorkshire faced a tripled premium and an excess of £8,500 before the Derwent Action Group (DAG) successfully campaigned on her behalf.

DAG's secretary, Di Keale, whose home in Norton, near Malton, has been flooded twice, said: "People are very concerned, and it seems to be a lottery depending on which insurance company you get."

Yesterday, MPs pleaded with the Government for more help to combat flooding in North Yorkshire.

Hugh Bayley, City of York MP, said the immediate response from the authorities and the public had been magnificent, but it had been much slower since, with the likelihood of new defences in the city still some years away.

Junior environment minister Elliot Morley said huge progress on flood protection had been made, but that schemes took time to develop