The cost of protecting the UK against flooding could treble over the next decade, the government has warned.
Increased flood risk will lead to higher home insurance costs and could lead banks to refuse to lend on affected properties, ministers said.
These latest predictions form part of a UK Climate Change Risk Assessment report carried out for the government over recent months.
The risk assessment is aimed at highlighting the parts of the economy which could be most seriously affected by long-term changes in weather patterns.
Environment Secretary Caroline Spelman said: "This world-class research provides the most comprehensive case yet on why we need to take action to adapt the UK and our economy to the impacts of climate change.
"It shows what life would be like if we stopped our preparations now, and the consequences such a decision would mean for our economic stability."
Flood damage costs to soar
The report suggested that the current annual cost of dealing with flooding in the UK of £1.2bn could rise to £3.5bn over the next 10 years without significant investment in flood defences.
Longer-term predictions are even bleaker, with the total cost forecast to rise to a possible £12bn a year by the 2080s.
These estimates come at a time when ministers and insurers are negotiating a new deal to ensure that homeowners in flood-affected areas are still offered buildings cover at an affordable price.
New insurance deal due soon
The government's current agreement with the insurance industry says insurers must continue to offer policies to existing customers.
But this agreement is based on the state maintaining the country’s flood defences at their present level.
Spending cuts implemented by the coalition have seen the money dedicated to such defences reduced and there are now worries that insurers will not renew the deal when it expires next year.
Minsters have said that they will devote just over £2bn to flood defences over the next four years.
Keep your costs under control
As well as hoping that insurance providers continue to offer cover at a fair price, there are steps you can take to help minimise the impact of flood damage and potentially keep your premiums under control.
The government’s Direct.gov.uk website explains what steps you can take to prepare for flooding, including checking exactly what cover your buildings and contents insurance provides.
The Association of British Insurers also has a guide to protecting your home against water damage if you live in a high flood-risk area.
The guide also shows how to repair affected properties in such a way that future insurance premiums do not become unaffordable.
However, some campaigners have reported that insurers do not always take into account the flood defences that their customers have invested in when setting premiums.
The Department for the Environment, Food and Rural Affairs (Defra), has responsibility for flood protection.
It says it is working with insurers to guarantee lower costs for homeowners who improve their properties’ defences.