The ABI’s latest figures reveal that motor insurers paid out £2.9 billion in the final quarter of 2025¹, as high repair costs continue to drive up claims, taking total payouts for the year to £11.9 billion ².
Motor insurance claims were largely driven by costs for damage to a vehicle, such as third-party damage, accidental damage and windscreen repairs. Payouts for vehicle damage totalled nearly £7.5 billion in 2025, accounting for 63% of total claims paid.
This emphasises how the cost of motor claims continues to be heavily influenced by the complexity of modern vehicles. Today’s cars are fitted with advanced systems, sensors, cameras and high‑value components, all of which are costly to repair or replace when damaged or stolen. The rising cost of parts also means repairs are becoming more expensive, and continued pressure on supply chains can result in longer repair times – which in turn adds further pressure to overall repair costs.
The average cost of cover in Q4 2025 was £559, 10.2% (£63) lower than the average cost in the same quarter during 2024³.
The ABI’s latest data follows the government’s recently published Road Safety Strategy, aimed at reducing deaths and serious injuries on the roads in Great Britain. This is a positive step to help tackle dangerous driving, but more can be done, including introducing graduated driving licences across the whole of the UK.
“Whilst it’s encouraging to see average premiums fall year-on-year in Q4, the cost of cover remains a challenge for many households and insurers are working hard to support their customers.
The £11.9 billion paid out in motor claims across 2025 highlights the pressure on the market, driven largely by the high cost of repairing today’s complex vehicles.
Close collaboration between industry, government and wider stakeholders is essential to help bring costs down, particularly as high-tech vehicles become increasingly expensive to fix.”
Chris Bose
Director of General Insurance Policy at the ABI
For more information, please contact the Press Office.
Footnotes
1. Claims payouts in Q4 2025 were consistent with levels seen in Q3 2025. 2. Insurance claims for privately owned cars, based on data which the ABI started collecting in 2013. 3. Across the full year, the annual average cost of cover in 2025 was £564 - 9%/£58 lower than the average annual cost in 2024.The ABI’s Q4 2025 motor claims data collection has improved market coverage compared to 2024. As a result, comparisons with previous periods should be treated carefully. Comparisons year on year of relative metrics such as average cost of claim and claims frequency should still be representative, but comparisons for absolute metrics such as total claims settled should be used with care.
The ABI’s Motor Insurance Premium Tracker is the most comprehensive in the UK, analysing over 28 million policies sold a year. It’s also the only collection that is based on the price customers pay for their cover rather than what they are quoted. More on this in our blog.
About the ABI
The ABI is the definitive voice of the UK’s world-leading insurance and long-term savings industry, which is the largest sector in Europe and the third largest in the world.
We represent more than 300 firms within our membership including most household names and specialist providers, providing peace of mind to customers across the UK.
Our sector is productive, inclusive and essential to the UK economy and together, we are driving change to protect and build a thriving society.
Find out more at abi.org.uk