The cost to the insurance industry of claims arising from widespread flooding last November has been estimated at £40 million (€50.79 million).

The figure was released yesterday by the Irish Insurance Federation (IIF) which warned planners and public representatives to avoid designating floodprone land for construction. IIF chief executive Mr Michael Kemp said the industry could not afford to continue dealing with the financial consequences of inevitable events.

The floods occurred on November 5th and 6th, 2000 - the wettest 24-hour period recorded in November since records began in 1839.

One industry source warned that the impact of weather losses coupled with the increasing cost of settling claims was expected to lead to higher premiums.

The IIF estimates that claims arising from household insurance will cost £21 million, with commercial property claims running to £19 million.

There have been 6,100 claims, most of which - 5,256 - were household claims. Flood damage tends to be more extensive than storm damage, with individual claims of this nature costing up to four times more.

A spokesman for the Royal & SunAlliance noted with concern that Irish insurers had been hit with three serious weather-related incidents in the past four years. "This has caused us to substantially change our expectations for the cost of claims under almost every heading and we expect all these costs to increase well ahead of the normal inflation level," he said.

The average cost of claims has also been driven up by socio-economic factors, he said. "People now have much higher-value possessions and increased replacement and building costs have contributed greatly to claims inflation," he said.

Land use was identified as a factor in contributing to the unprecedented scale of the November floods, according to the IIF. Building in areas prone to flooding may have consequences for householders seeking insurance cover.

"Insurance is about risk and if flooding becomes a regular occurrence in a particular area it may no longer be considered an insurable event," a spokesman for the IIF said.

After the most recent floods the Government announced its intention to provide a humanitarian package for people who had suffered flood damage and did not have insurance cover.