The average claim payout increased to £4,900, up 4% on the previous quarter, reflecting continued pressure from rising repair costs. While modern vehicles are increasingly fitted with advanced technologies such as cameras, sensors and driver assistance systems that can improve road safety, these features can also make repairs and replacements more costly.
Windscreen repairs in particular saw a sharp quarterly increase, with the average repair cost rising 7% to £283.
Despite these ongoing claims pressures, motor insurance premiums remained relatively stable. The average premium paid rose by £6 (1%) during the quarter to £566. Adjusted for inflation, this remains £14 lower than the average premium in the same quarter of 2025.
Chris Bose, Director of General Insurance and International Policy at the ABI commented: "Motor insurers are working hard to keep premiums competitive and affordable for customers, despite ongoing high claims costs. The Motor Insurance Taskforce provides a real opportunity for the new government to work with insurers and the automotive sector on this, to help improve affordability for drivers further.
Alongside the positive steps the industry is taking to improve the claims handling process and to tackle vehicle-related crime and fraud, Government investment is also needed. By increasing repair sector skills and improving parts availability, policymakers can help the sector keep pace with vehicle innovation and support a more resilient market. We stand ready to work with government and industry to help deliver these reforms."
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