As swathes of the U.K. battle with severe flooding – and weather forecasts indicate that more storms are on the way – insurers prepare to take a hit of over £500 million ($826 million) and households brace themselves for higher premiums.
The U.K. has experienced the wettest January on record, with widespread flooding continuing into February. The south of England has been worst hit, with 5,000 homes flooded and 16 severe flood warnings in place for the region.
"If the accumulation of extreme weather claims extends into February, the insurance industry could be facing a bill of £500 million for the exceptional autumn and winter weather claims matching the cost of the big freeze in 2010," James Rakow, insurance partner at Deloitte, wrote in a note.
Rakow's estimates came after the Association of British Insurers (ABI) put the bill for the damage caused by storms and floodings between 23 December and 8 January at £426 million, with insurers dealing with 174,000 claims for damage.
And as the bad weather continues, there are concerns that flood damage could get worse. Rakow added that if the current conditions persisted into March, the cost for the insurance industry could be closer to £1 billion.
The U.K.'s Met Office issued a rare "red warning" for winds of up to 100 mph in west Wales and north-west England on Wednesday - the first such warning this winter. Meanwhile, the Environment Agency said the River Thames – which flows through London - was set to rise in places to its highest levels for over 60 years.
On Tuesday, Prime Minister David Cameron insisted that, "money is no object in this relief effort. Whatever money is needed for, it will be spent."
While there is no official figure of the total number of evacuations, some areas have seen large-scale evacuations. About 1,000 homes on the River Thames have been evacuated in the past few days, according to the Environment Agency, while Surrey Police said on Tuesday they had carried out 538 rescues since Sunday.
And it's not just households that are being hit, with numerous businesses also being evacuated in Britain.
SunGard, which provides business continuity services during natural disasters, reported that a growing number of customers had utilized their services over the past 48 hours.
"We have customers that have moved away from their day-to-day (location) and are running their services out of our recovery centers - and several others that have put us on alert, or on stand-by," Patrick Morley, SunGard's operations director for Europe, told CNBC.
It's not the first time the U.K. has had to deal with significant flooding. In 2007, England and Wales experienced the wettest conditions in 200 years and nearly 50,000 households were affected. The Association of British Insurers (ABI) said payouts hit a total of £3 billion.
Morley stressed that as flooding becomes more common, businesses need to ensure they are prepared to continue despite the disruption – and that the current flooding should act as a wake-up call.
"Supply chains are often affected; critical suppliers may not have continuity plans so businesses (should) become more diligent with their supply chains," he said.
He added that preparation was "absolutely integral."
"Customers cannot afford to be off the air. The minute your website is down, people are fickle and will go to a different supplier," he said.
(Read more: Flood insurance battle reaching high-water mark)
Rakow warned that one results of the flooding would be a rise in insurance premiums, with households facing a hike of between £10-15 per year.
Although he said that Flood Re - a not-for-profit reinsurance scheme due to be launched in 2015 – should help matters. Flood Re will be run by the insurance industry and should enable those who might otherwise struggle to get affordable flood insurance by offering cover at a set price.
"If Flood Re is launched in 2015 it should keep premiums affordable for high risk flood areas," Rakow said.
—By CNBC's Kiran Moodley. Follow him on Twitter @kirancmoodley