New figures from the Association of British Insurers (ABI) show that motor insurers paid out £11.9bn in claims throughout 2025, a number that reflects both the pressures facing insurers and the wider challenges motorists experience today. While the headline figure is striking, it tells an important story about how modern vehicles, repair demands and supply chain pressures continue to shape the motor insurance market.
The Rising Cost of Vehicle Repairs
According to ABI, payouts for vehicle damage totalled nearly £7.5bn in 2025, making up 63% of all motor insurance claims paid that year. And it’s not hard to understand why. Today’s vehicles are far more technologically advanced, with features such as sensors, cameras and safety systems all adding complexity when something goes wrong. These higher‑value components mean repairs take longer and cost more, especially when parts are delayed or difficult to source.
Falling Premiums, Rising Challenges
Despite increasing claims costs, the average premium in Quarter 4 of 2025 fell to £559, a 10.2% reduction compared with the same period in 2024. On the surface, this seems positive for motorists. But for insurers, it creates a tighter squeeze between income and expenses.
The Role of Road Safety in Reducing Claims
The government’s newly launched Road Safety Strategy aims to reduce serious injuries and fatalities on UK roads, and the ABI has welcomed this as a positive step. Better road safety ultimately benefits everyone: fewer incidents mean fewer claims, reduced repair costs and, over time, more stable premiums. The ABI is also calling for measures such as graduated driving licences to help build safer driving habits from the start.
Working Together to Support Motorists
Across the industry, there’s a shared recognition that navigating high repair costs and evolving vehicle technology requires strong collaboration. Insurers, repair specialists, manufacturers and policymakers all have a role to play in creating a more resilient market. As Chris Bose from the ABI notes, “working together is essential if we’re to bring repair costs under control and support motorists effectively”.
The £11.9bn paid out in 2025 reflects a challenging year, but it also shows an industry committed to helping motorists when they need it most. The pressures are real, but so is the progress, from improved safety measures to a growing understanding of how modern vehicles affect repair times and costs.
Speak to our personal insurance team today to discuss your car insurance. Call us on 02920 853759 or email contact@thomas-carroll.co.uk. If you have an accident or break down, our in‑house claims team will always be on hand to help.
