Motor insurers paid out a record £11.7 billion in car insurance claims in 2024,1 as increases in theft and repair costs continued to impact premiums, according to the latest data from the Association of British Insurers (ABI).
The average cost of motor cover in the final quarter of the year was £621. While this is 2% lower than prices paid at the start of 2024 (£635), when taken as an annual average, the cost of cover in 2024 was £622, 15% (£78) higher than 2023. This is against a backdrop of total claims payouts that were 17% higher in 2024 compared to the previous year.
The ABI’s latest claims data shows:
- Over the course of 2024 insurers dealt with 2.4 million motor insurance claims.
- The average private motor insurance claim paid in 2024 rose 13% on 2023 to £4.9k. In the final quarter of 2024, the average claim hit £5.3k – an all-time high.
- Vehicle repair costs totalled £1.9 billion in the fourth quarter 2024, taking the yearly total to £7.7 billion – another record high and £1.5 billion more than the 2023 yearly total.
- The average claim for theft of and from a vehicle hit £11.2k in Q4 2024.
The latest data from the ABI comes one year after the trade body launched its 10-Point Roadmap, which sets out steps that the industry and government can take to tackle insurance costs. In an update report, the ABI has shared the progress made in some key areas including: tackling vehicle theft, cracking down on insurance fraud and uninsured driving, helping consumers make informed decisions, and reducing the impact of the Person Injury Discount Rate (PIDR).
Through ongoing collaboration with its members, partner organisations, regulators and the government, the ABI will continue to build on this progress. Government could also combat high claim costs by addressing the skills and capacity challenge in the vehicle repair sector, improving the UK's roads and delivering its road safety strategy.
Our latest data paints a difficult picture for drivers and the industry alike. 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. 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.”
Mark Shepherd
Head of General Insurance Policy at the ABI
ENDS