Weather claims swell as insurer payouts reach £4.6bn

Insurers paid out £4.6bn in property insurance claims across the first three quarters of 2025, their highest ever figure, according to the ABI.

The payouts stand at £155m, or 3%, above the same period last year after Q3 saw insurers pay out just shy of £1.5bn – and if current projections for the remainder of the year are met, 2025 will prove to be the highest-paying year on record.

The data indicated that a large portion of the total sum had been driven by adverse weather conditions across the UK, with the nine-month total of successful weather-related claims climbing £143m from 2024 to reach £936m.

Of the £936m in weather related claims, £596m was channelled directly into reimbursing personal lines policyholders for damage to their homes and possessions, up 21% on 2024.

The ABI said that these figures underscored the “urgent need to embed climate resilience into new housing developments”, including by “designing and constructing homes that can withstand flooding, extreme heat, high winds and subsidence” and most importantly not building homes in areas prone to flooding.

Building resilience

Mark Shepherd, head of general insurance policy at the ABI, said: “Building resilience into new homes is essential if we’re to manage the growing risks posed by climate change.

“But resilience isn’t exclusive to new builds. As extreme weather becomes more frequent, existing homeowners also need to know how to protect what they already have.”

Despite the increase in payouts, however, the annual average price of combined building and contents home insurance in Q3 2025 was £384, £7 lower than the previous quarter and £15 less compared to the same period in 2024.

“It’s encouraging, and a relief for households, that premiums have declined for three consecutive quarters,” Shepherd said.

“To avoid undoing this hard-won progress, it’s vital that insurance premium tax stays at its current level in tomorrow’s budget, to ease mounting financial pressures for households and businesses doing the responsible thing and protecting their properties.”