Motor insurers paid out £11.9bn in 2025

Motor insurers paid out £2.9bn in the final quarter of 2025, taking total payouts for the year to £11.9bn.

That is according to the ABI, which said 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 £7.5bn in 2025, accounting for 63% of total claims paid.  

The ABI said the figures show that motor claims continue 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,” it said.

”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.”

Cost of cover

Meanwhile, despite the high payouts, the ABI revealed that motor cover decreased year-on-year in the final quarter of 2025.

It said that the average cost of cover in Q4 2025 was £559, 10.2% (£63) lower than the average cost in the same quarter during 2024.

Chris Bose, director of general insurance policy at the ABI, said: “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 £11.9bn 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.”