UK motorists face payout gap as write-offs outstrip insurance cover

Motorists across the UK are being left financially exposed when their vehicles are written off, despite having comprehensive cover, new research from ALA Insurance has revealed.

Rising repair costs and increasing write-off rates have exacerbated the issue. Figures from Auto Claims Assist showed average repair costs rose 24.7% between 2019 and 2025’s year-to-date, climbing from £4,162 to £5,191.

Over the same period, the proportion of vehicles written off increased from 58% to 66.5%.

ALA’s study, published in September 2025, found that 62% of drivers could not afford a like-for-like replacement car using their comprehensive payout alone. A further 65% were unable to purchase even a market-value equivalent.

Jason Allen, underwriting director at ALA Insurance, said: “Our research shows that a total loss can be financially devastating for most drivers. Comprehensive insurance often isn’t enough to cover the cost of replacing a vehicle and many drivers are unaware of the options available to protect themselves from these shortfalls.”

Awareness gap

The insurer’s data revealed that 68% of drivers received less than £5,000 for their written-off vehicles, with 38% receiving less than £2,500. Only 16% secured payouts over £10,000 and just 5% received more than £20,000.

Despite these gaps, awareness of Gap insurance – designed to cover the difference between an insurer’s payout and the replacement cost – remained low. The report found that 81% of drivers were unaware of the product, while 63% mistakenly believed comprehensive policies provided complete protection.

Allen continued: “Car dealerships remain the primary source of Gap insurance information, cited by 54% of those aware of the product. This suggests that many drivers are missing out on vital education about how they can protect themselves financially.”

Nearly half of respondents said they would struggle financially if their car was written off today, with a further 18% unsure of their ability to cope. Meanwhile, 66% admitted they rarely or never considered the financial implications of a total loss.

Allen added: “We encourage all drivers to review their insurance policies and consider whether they are fully protected against the unexpected. Gap insurance can be the difference between financial hardship and peace of mind after a total loss.”