A Plymouth woman was given a £10,500 flood insurance excess, despite never having been flooded or making a claim.
Jenny Kaddem runs a local convenience shop in Colebrook, Plymouth - a village badly hit by flooding last year.
Although the shop did not flood, her insurance company added the "ridiculous" excess and increased her renewal premium by more than £1,000.
"It was totally unfair," Mrs Kaddem, who has since found alternative insurance cover, said.
"I just couldn't believe it when I saw it, because I was one of the few that didn't flood.
"When I tried to explain to the insurers - they didn't want to know."
Mrs Kaddem's annual premium rose by £10 in 2011 and by £25 last year, so she said the proposed £1,200 increase for this year - from £1,537 to £2,746 - had been a complete shock.
'Flood risk consequences'
"I tried for weeks to get cover, but because of the postcode most of them didn't want to know... it's a ridiculous situation," she said.
"I've had the shop for six years and I've never made a claim, so I don't know how they can justify doing something like this."
A local mortgage broker was eventually able to secure alternative cover for Mrs Kaddem.
"It took until the 11th hour - literally a couple of days before the insurance ran out - but I've now got insurance for £950 and no excess," she added.
Earlier this year Janet Luke, another Colebrook resident who had been flooded, was refused insurance cover.
However, following the intervention of the local MP, her insurance company relented, but she too was given a £10,000 excess.
Mrs Kaddem and Mrs Luke's experiences have added to concerns about a scheme - agreed in principle between the Association of British Insurers (ABI) and the government - which is supposed to guarantee "affordable" insurance for flood victims.
The Flood Re scheme involves UK insurers paying into a fund which would then cover the costs of flooding claims.
"It may well be that solicitors are finally waking up to the need to do searches on flood risks and we're beginning to see the consequences of that," Paul Cobbing from the National Flood Forum said.
Mr Cobbing said Flood Re would address the issues of access to flood insurance and affordability.
However, he was concerned there was no guarantee the scheme would be approved.
"Part of the deal depends on approval from the European Commission, so that's significant," he said.
"There are also some big cash flow issues for the insurance industry that need to be agreed."
The Department for Environment, Food and Rural Affairs said Flood Re would give people peace of mind by guaranteeing "affordable" flood insurance and its minister George Eustice insisted the scheme would go ahead.