Average home and business insurance payout hits record £10,000

The average home and business insurance payout reached a record £10,000 for claims in Q3 2026, according to the ABI’s latest property insurance tracker.

The tracker revealed that the total number of home and business claims fell by 4% to 142,000 over the quarter, while the amount paid out by insurers increased by 1% to £1.5bn.

The ABI said that the increase reflects rising repair costs across the supply chain, including higher price of materials and labour, as well as more severe weather causing more significant damage to properties. 

Indeed, ABI members received 13,000 new domestic subsidence claims from July to September this year, compared to 8,000 over the same time period in 2025.

The average domestic fire claim reached the third highest quarterly level on record – standing at £38,000 – and the average insurance payout for subsidence damage to a home remained at a record £20,000 for the second consecutive quarter.

The average domestic flood claim cost £28,000, which stands slightly lower than previous quarters but ranks as the third most expensive peril.

Chris Bose, director of general insurance and international policy at the ABI, said: “This year’s weather has painted a clear picture of what’s to come, with heatwaves and storms hitting communities right across the UK.

”Insurers stand ready to help people repair and rebuild, but more action is needed to prevent damage in the first place.These record costs show the severe damage that extreme weather is now causing for communities and the need to boost resilience.”

Premium changes

Meanwhile the average annual home insurance premium rose by £4 quarter-on-quarter to £329 in Q3 2026, but remained unchanged year-on-year.

For combined policies, the average annual premium rose to £389 – up £3 year-on-year and £6 compared with Q2 2026.

Buildings and contents-only insurance premiums have also fallen year-on-year as buildings-only premiums fell by £13 to £310, while contents-only policies fell £7 to £118.

Bose added: ”It’s vital that new homes are built to withstand increasingly frequent extreme weather and that we work together to improve the long-term resilience of our homes and businesses.”