Millions of flood-hit residents to be priced out of home insurance market

And those in the worst-affected aresas will be hit even harder.

Norwich Union - the UK's largest general insurer with a market share of 14 per cent and 4.3 million customers - admitted that July's appalling weather had been "an element" in the decision to raise domestic premiums by more than three times the rate of inflation.

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But the firm, the UK's largest household insurer, claimed it had been looking at costs before the washout summer.

Norwich Union, which insures about one in five homes in the UK, has estimated the floods could cost it about £340 million in payouts to customers.

A spokesman said: "There has been a number of events that have dictated it would be appropriate to review premiums.

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"The recent weather is an element of it because the flooding has been substantial and incredibly traumatic.

"For all insurance companies this has been a problem and all are facing significant costs because of it.

"We need to make adjustments against a background of stable premiums for the last six, seven or even ten years."

He added that properties in flood-risk areas would see the highest increases.

Norwich Union also blames the rise on the trend for more ensuite bathrooms, which led to more claims for damage from leaking baths and showers.

Its parent company, Aviva, has told investors that the first wave of floods, mostly in northern England, would lead to a bill of £175m.

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It says it had to double the number of call centre staff and sent a mobile advice centre to flood-hit Gloucestershire.

The Association of British Insurers believes its members face the biggest flood bill for about 20 years, with claims set to exceed £2 billion.