SCORES of the borough's homes and businesses face losing their flood damage cover.
The threat of being left without cover from next year looms large as an agreement to find extra public funds to keep the flood insurance industry afloat looks in doubt.
Failure to find a solution could prove devastating for householders and business owners who took out policies following Purley's floods between 2006 and 2007, in which hundreds of thousands of pounds worth of damage was done.
The news comes as hundreds of homes across the country have been swamped by deluges.
The Association of British Insurers (ABI) this week confirmed Purley homes are among 200,000 affected across England.
Ian Harris, owner of The Jolly Farmers pub and a warden for Purley's pioneering flood plan launched earlier this year, described the situation as "worrying" after suffering £20,000 to £30,000 worth of damage more than five years ago.
He said: "We were without doubt the worst affected business in Purley. It was a combination of two things.
"First, our location was where the deepest water is, but in addition to that the heart of the business is in the cellar, with the beer stocks and electrical equipment.
"Purley is a high-risk flood area because of its geographical location and if it does flood you may lose your business.
"And if you're not insured it's not even worth thinking about."
Areas at high risk face being unable to renew, or take out, cover beyond June next year following the Government's refusal to stump up additional funds for an "overdraft" facility if claims become too much for insurers.
The industry has been holding out for a deal in which householders or businesses in high-risk areas would have to pay extra on top of normal premiums. This would then be pooled to cover collective losses.
But insurance bosses are demanding the Government provides a guaranteed "overdraft" to fund any emergencies as the pooling scheme builds up over the first two or three years.
In the absence of a guarantee, cover may not be offered to firms and homes from next June.
Sunny Patel, who owns Good News in Brighton Road, was left with £7,500-worth of damage following the town's floods and says being able to renew his flood policy is crucial.
He said: "If we were unable to get cover, and then we were flooded, it would be devastating. It would be the end of us."
Tarsem Flora, chairman of Purley and Woodcote Residents' Association and leader of Purley's community flood plan, said the problem is so serious he has written to Croydon South MP Richard Ottaway to lobby the Government on behalf of residents.
He said: "Flooding is now becoming a very serious problem and Purley remains at risk. The present debate between the Government and the insurance companies needs to be settled as a matter of urgency. Nick Starling, director of general insurance at ABI, said: "The Government has indicated it will not provide any temporary overdraft facility for the insurance industry's not-for-profit scheme, which makes it very difficult for it to go ahead. "As a result, negotiations have hit an impasse. "Insurers know their customers are increasingly worried about flood cover and we will therefore continue talks with Government to try to and find a way forward. "The severe floods experienced by many areas of the UK this year are a reminder of the rising flood risk facing the UK. It is therefore vital that insurers and Government tackle this issue together – this is not just a problem for insurers. "No country in the world has a free market for flood insurance with high levels of affordable cover without some form of government involvement."
