Thousands of flood-hit homes could be left without insurance cover by early next year, a leading industry body warned today.

Homes in the North-East and North Yorkshire have been devastated by flooding over 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 by the end of 2002, causing fears that thousands of home owners may not get cover after then.

Peter Staddon, of the British Insurance Brokers' Association (BIBA), said after the end of 2002, 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 to us."

There have also been fears about vast increases in excesses and premiums. One flood-hit home owner 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, North Yorkshire, has been flooded twice, said: "People are very concerned and it seems to be a lottery depending on which insurance company you get."

Yesterday, some of the region's MPs pleaded with the Government for more help to combat flooding in Yorkshire.

John Grogan, MP for Selby, which was devastated in November 2000, warned against a "flood plain levy" to pay for defence work, saying it would have significant disadvantages for local people.

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.

"The Environment Agency needs to get out and meet the communities affected and explain what they are doing and what can be done," he said. Junior environment minister Elliot Morley said "huge progress" on flood protection had been made, but that schemes took time to develop.