The catastrophic floods that have hit the south west Midlands and Thames Valley could cost the insurance industry over £2bn according to the Association of British Insurers (ABI).

With the waters at last receding, and better weather forecast, insurance firms are now expecting a deluge of calls as battered householders try to repair the financial damage along with the physical fabric of their homes.

The ABI admitted that the £2bn figure was an “estimate”, as many people are yet to submit a claim, particularly those who still cannot even get near their homes to check their policies. The final figure may well be higher, industry sources said.

Some insurers admitted that the sheer volume of claims meant they would be under siege from claimants for the foreseeable future. Direct Line conceded that service would be “slower than normal”.

The ABI said its members would continue to insure homes in flood-prone areas as long as the Government continued to maintain and improve defences.