Homeowners in flood-prone areas are at risk of losing insurance cover unless the Government steps in to help the industry.
Talks between ministers and insurance bosses have stalled, the Association of British Insurers (ABI) said.
It claimed that without an agreement, 200,000 households may struggle to get affordable household insurance when current arrangements come to an end next year.
Insurers had hoped to create a system where flood-risk policyholders would pay an average additional premium levy of £9 towards a pooled fund for payouts.
"Every household and community hit by flooding is relying on them to ensure that flood risk insurance is available to all, is affordable and is based on social justice," said Charles Tucker, chairman of the National Flood Forum , a charity that supports people at risk of flooding.
"These negotiations have been going on for over two years and for them to break down at this stage is outrageous.
"It's now time for action. We need to see exactly what is being proposed by both sides and knock heads together."
Environment Secretary Owen Paterson criticised the insurance industry for causing "alarm" to flood victims, and said the Government was "completely determined" to come up with an affordable and comprehensive scheme that did not burden taxpayers.
"There are a lot of people across the country who are going to face some very bad weather over the next few days," he said.
"Many people are extremely worried and I think it is not helpful to alarm people when we are in close, detailed negotiations with them."
Meanwhile, the Environment Agency (EA) has told Sky News it has no immediate plans to redraw its map for households and business at risk of flooding across Britain, seeing it as a longer-term issue.
The decision comes as heavy rain deluged wide parts of the South West, before moving into areas of North Wales and the North East.
Nearly 250 flood warnings and 300 flood alerts have been put in place, after a weekend of almost non-stop rain left at least 800 homes swamped with water.
The ABI said it is far too early to put a price on the latest devastating floods.
"The floods in 2007 cost the industry £3bn in claims and the 2009 Cumbria flooding cost £175m," an ABI spokesman said.
"Floods are becoming more common and more expensive - last summer's flooding caused another £400m damage."
The EA has previously said that the risk of flooding is likely to increase in Britain because of climate change.
Local authorities currently use the EA's Development and Flood Risk Practice Guide for planning purposes.
It was last published in December 2009 by the Department for Communities and Local Government to aid in planning decisions.