Insurers paid out a record £3.2 billion to support motor insurance customers in Q2 2026, according to the latest data from the ABI.1 This was 5% higher than the previous quarter, and 7% more than the same period last year.2
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 2025.3
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.
Chris Bose
Director of General Insurance and International Policy
Notes for Editors
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Footnotes
- The ABI’s Motor Insurance Premium Tracker is the most comprehensive in the UK, analysing over 28 million policies sold a year. It’s also the only collection that is based on the price customers pay for their cover rather than what they are quoted (which typically delivers higher averages). More on this in our blog.
- Insurance premiums and claims for privately owned cars, based on data which the ABI started collecting in 2013.
- Inflation adjusted data shows what historic costs would have been if they faced the same inflationary pressures we're experiencing today, uncovering the real growth or decline.
- The Motor Insurance Taskforce’s report, published December 2025, laid out recommendations for government and industry to stabilise and reduce the motor insurance premium prices. The industry has since made significant progress to support customers and bring down costs, including taking steps to streamline the claims handling process, and through its funded partnership with The National Vehicle Crime Intelligence Service (NaVCIS) to tackle vehicle-related crime and insurance fraud.