Motor claims driven up by rising repair costs – ABI
Insurers paid out £2.9bn in motor claims in the final quarter of last year, according to new figures released by the ABI.
That took the annual figure to £11.9bn, with high repair costs the main contributing factor to higher claims costs.
It said repair costs are being driven up by increasing technology in modern vehicles as well as rising parts costs and longer repair times as a result of supply chain challenges.
According to ABI data, vehicle damage such as third-party damage, accidental damage and windscreen repairs accounted for 63% of total claims paid, or £7.5bn.
High cost
Chris Bose, director of general insurance policy at the ABI, said: “While it’s encouraging to see average premiums fall year-on-year in the fourth quarter, 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.”
