A SECOND flooding crisis in the space of two years could send insurance premiums in badly-affected areas soaring once again.

The Association of British Insurers has set the Government a deadline of two years to improve defences against flooding before high-risk properties are excluded from cover.

People living in North Yorkshire and parts of County Durham are expected to see major increases soon in their buildings and contents insurance.

If the situation deteriorates, some households could be refused insurance cover altogether.

With improvements to flood defences likely to take years to put in place, and better forecasting now available to insurers, high-risk properties will be targeted for premium increases.

The knock-on effects of flooding have been felt in North Yorkshire neighbours Malton and Norton, where estate agents have reported a chain reaction hitting first-time buyers.

Estate agents have had problems selling properties which suffered flooding in the past two years as younger buyers are unable to find insurance cover.

The Environment Agency said flood claims totalling £56m were made in the first three months of this year, compared with £49m for the whole of 1999.