Motor insurers paid out £11.9bn and settled 2.5 million claims in 2025, according to data from the Association of British Insurers. In the final quarter of 2025, it said motor claims costs totalled £2.9bn. In Q4 2025, the ABI said the average cost of cover was £559, more than 10% lower than during the same period the previous year.

Vehicle damage accounted for almost £7.5bn (63%) of the total claims costs. The ABI said this reflected the high costs attached to repairing increasingly sophisticated vehicles. In addition, the professional body said ongoing pressure on supply chains often led to longer repair times.

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.”