Motor claims hit record £11.7bn as repair costs rise

UK motor insurers paid out a record £11.7bn in claims in 2024 as vehicle repair costs surged, according to the ABI. 

Data published today (17 February 2025) showed that insurers dealt with 2.4 million motor insurance claims last year, with payouts 17% higher compared to 2023.

Figures also showed that the average private motor insurance claim rose 13% on 2023 to £4,900. In the final quarter of 2024, the average claim hit £5,300 – an all-time high.

The increase in claims payouts came as a result of vehicle repair costs totalling £1.9bn in the fourth quarter 2024, taking the yearly total to £7.7bn.

The average claim for theft of and from a vehicle, meanwhile, hit £11,200 in Q4 2024 alone.

Mark Shepherd, head of general insurance policy at the ABI, said: “Our latest data paints a difficult picture for drivers and the industry alike.”

Roadmap

The latest data from the ABI comes one year after the trade body launched its 10-Point roadmap.

The roadmap is aimed at tackling insurance costs for drivers and includes a combination of actions that the industry, government and regulators could initiate or improve.

The ABI has released a report about actions taken since the roadmap was released, with it highlighting efforts to improve affordability.

However, the ABI has called for further government intervention to reduce high claims costs.

“Through our 10-Point Roadmap, we’ve been working hard to help tackle the cost of motor insurance and we’ve seen progress in some areas, with average premiums having fallen from their peak,” said Shepherd.

“However, we recognise that the price of cover remains a strain on household finances whilst the industry faces significant cost pressures.

“Industry is doing all that it can, but it is now for government to take the necessary action to combat high claim costs.

“And it’s vital that government does not further increase costs for hard working households and businesses by raising insurance premium tax at the upcoming spring forecast.

“We look forward to continuing to work with the government and wider sector to help support drivers and tackle claims costs.”