Climate change could cause the number of people at high risk from flooding to rise from 1.5 million to 3.5 million, and some homes and businesses could be uninsurable to flood risk in the future, a new report warns.

More Than, the household insurer, warned that unless spending on flood defences was increased by up to £30m a year, many insurers would withdraw cover from homes deemed to be in areas at "high risk" of flooding.

David Pitt, the head of insurance at More Than, says that within years there could be a "widespread withdrawal" of insurance cover if more isn't done now to protect homeowners.

The insurer said that the floods that devastated many homes in the South East in 2000 and more recently events like Boscastle were "a wake-up call to the insurance industry".

The Boscastle flash floods in August last year caused £15m of damage, and the average domestic flood damage bill now tops £30,000.

Worried insurance companies have been turning to the Environment Agency's online flood risk map to assess the "insureability" of properties before offering terms and conditions to homeowners but many people have found themselves classed as a flood risk, despite no history of flooding in the area nor any apparent immediate threat.

However, More Than, has developed its own flood map, which looks at individual properties rather than wider postcode areas and consequently the insurer may be able to offer those risk-classified under the Environment Agency's map a better policy.

In January 2003 the Association of British Insurers published a statement of principles which committed insurers to offering buildings and contents insurance to families in flood risk areas so long as the area has flood defences in place. However, insurers are now warning the government they would only remain committed to the 2003 principles as long as the Government continued to increase its spending on flood defences.

More Than, which is the direct arm of insurer Royal & Sun Alliance, also raised the issue of the proposed 200,000 new homes are planned for South East England in flood risk areas and the effectiveness of the Thames Barrier, which is only designed to last until 2030.

Friends of the Earth climate campaigner, Germana Canzi, said: "This report highlights the enormous economic threat posed by climate change. Better flood defences are obviously required, but urgent action is also needed to reduce carbon dioxide emissions."