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Insurers have warned that the Government's Flood Re scheme will not cover expensive properties in council tax band H - even though residents will have to pay the levy.
Thousands of under-threat homes in the Thames Valley and Somerset Levels are thought to be affected by the loophole.
Stephen Lark, director at Lark Insurance, said: "The threat to property in the Thames Valley only further underscores a very serious flaw in the Government's flood insurance scheme.
"Thousands of properties will be included in the cost of Flood Re while being banned from the scheme's protection. The Government needs to listen to homeowners and the insurance industry and fix these unworkable proposals."
NFU Mutual which provides insurance for 70% of the farming industry, rural homes and businesses has told ITV News it has received over 8,000 claims after recent floods.
They estimate the cost of these claims will be £60m.
The accountancy firm Deloitte has told ITV News that if the accumulation of extreme weather claims extends further into February, the insurance industry could be facing a bill of £500m for the exceptional autumn and winter weather claims.
This would matching the cost of the big freeze of 2010.
Latest ITV News reports
Figures received by ITV News suggest any failure to invest money in flood defences and dredging could have been a false economy.