Hundreds of thousands of homes could be uninsurable and uninhabitable unless stricter planning controls are introduced, insurers have warned.
The Association of British Insurers (ABI) said a third of the three million new homes the government wants to see by 2020 will be built on flood plains.
It said 13 major developments have been passed, despite Environment Agency advice on flood risk in the past year.
The government says all were approved before it brought in tough new rules.
Seven of the sites, including a new caravan park and a development of bungalows, are deemed to be at high risk from flooding.
The association said where a local authority plans to ignore flood risk advice, the government should step in and review the proposals and be compelled to publish their decision.
"The government's ambitious housing plans are in jeopardy unless we reduce the flood risk," said the ABI's assistant director of property, Justin Jacobs.
"Insurers want to continue to provide flood cover, but poor planning decisions will lead to more homes becoming unsaleable, uninsurable and uninhabitable."
Despite the Environment Agency being consulted on new developments, as a statutory requirement, planning permission was still being given despite the agency highlighting flood risks, the group said.
Responding to allegations that builders had built too many homes on flood plains, John Slaughter of the Homebuilders' Federation said his members were not ignoring advice about flooding.
"We want to build homes to meet the housing crisis, but not just wherever... because it's not in the industry's interests to do that. We have to think of our members' reputations long-term.
"If they're building unsound products in unsound areas that's going to come back and haunt the industry pretty quickly," Mr Slaughter told the BBC.
The Conservatives have accused the government of having an "obsession with building in flood-prone areas" which threatens to create the "sink estates of the 21st century".
"We support building more homes, but I fear that the government's poorly thought-through plans are going to leave the country with sprawling housing estates, high density blocks without proper infrastructure and increase the risk of flooding", the shadow local government minister, Stewart Jackson said.
"Local communities and not unelected Whitehall bureaucrats should decide where new homes are built."
But the Housing Minister, Iain Wright, dismissed these claims as "wide of the mark" and said the government had introduced the toughest planning rules ever to ensure that local councils managed flooding risks properly.
"It is up to councils to decide whether to give planning permissions for new housing development, but these rules mean they must consult with the Environment Agency before allowing new building in flood risk areas", Mr Wright said in a statement.
"We are prepared to use our powers to take over decisions if required, however all of the developments highlighted by the ABI were decided by councils before the introduction of these planning protections", the minister said.
The 2007 floods in Yorkshire, Gloucestershire and Worcestershire will cost the insurance industry more than £3 billion, and, combined with other events, they helped make 2007 the worst year ever for weather-related claims.
The ABI said insurers had so far paid out £1 billion of claims as a result of last summer's floods.
More than half of the 15,000 households that were in temporary accommodation have now been able to return home, while three-quarters of people are expected to be back in their own homes before Easter, it added.
Insurers have pledged to continue offering flood insurance to existing policyholders where the risk of floods is being managed.
But after the 2007 floods and in the light of the increasing number and extent of floods linked to climate change, the industry is reviewing the issue.