The average home and business insurance payout reached a record £10,000 for claims across July, August and September 2026, according to the latest Property Insurance Tracker from the ABI.¹

While the total number of home and business claims fell by 4% to 142,000 over the quarter, the amount paid out by insurers increased by 1% to £1.5 billion. The increase reflects rising repair costs across the supply chain, including higher price of materials and labour, as well as more severe weather causing more significant damage to properties. 

The average cost of home insurance claims for severe perils, such as fire, flooding and subsidence, stayed consistently high over the summer. The average domestic fire claim reached the third highest quarterly level on record, standing at £38,000, and the average insurance payout for subsidence damage to a home stayed at a record £20,000 for the second consecutive quarter. The average domestic flood claim cost £28,000, slightly lower than previous quarters but ranking as the third most expensive peril.

Record number of subsidence claims received 

The Met Office expects 2026 to have been the hottest UK summer on record.² This prolonged period of hot and dry weather increased the risk of ground movement which can lead to subsidence. 

ABI members received 13,000 new domestic subsidence claims from July to September this year, compared to 8,000 over the same time period in 2025 and the highest number on record.³ 

Homeowners concerned about subsidence should be aware of several warning signs, and speak to their insurer and seek professional advice if they notice any of the following:

• Keep an eye out for cracks that are wider than 3mm – about the thickness of a £1 coin – as these may need further investigation.
• Be particularly aware of diagonal cracks, especially if they are wider at the top than at the bottom.
• Subsidence-related cracks often appear suddenly, rather than developing gradually through normal wear and tear.

Household property premiums

The average annual home insurance premium for Q3 2026 was £329, which is the same as in Q3 2025, though a rise of £4 from Q2 this year.

For combined policies (buildings and contents insurance), the average annual premium now stands at £389, £3 more than in the same period last year, and £6 more than in Q2 2026. 

Buildings and contents-only insurance premiums have fallen year on year. Buildings-only premiums fell by £13 to £310, while contents-only policies fell £7 to £118. Quarter on quarter, buildings-only premiums rose by £1, while contents-only policies stayed constant.

This year’s weather has painted a clear picture of what’s to come, with heatwaves and storms hitting communities right across the UK. Insurers stand ready to help people repair and rebuild, but more action is needed to prevent damage in the first place.

These record costs show the severe damage that extreme weather is now causing for communities and the need to boost resilience. It’s vital that new homes are built to withstand increasingly frequent extreme weather and that we work together to improve the long-term resilience of our homes and businesses.

Chris Bose

Director of General Insurance and International Policy at the ABI

About us

The ABI is the definitive voice of the UK’s world-leading insurance and long-term savings industry, which is the largest sector in Europe and the third largest in the world.

We represent more than 300 firms within our membership including most household names and specialist providers, providing peace of mind to customers across the UK.

Our sector is productive, inclusive and essential to the UK economy and together, we are driving change to protect and build a thriving society.

Find out more at abi.org.uk