Record £11.7bn paid in motor claims in 2024 says Association of British Insurers
Motor insurers paid out a record £11.7 billion in car insurance claims in 2024, with the average cost of cover paid by drivers rising by £78 annually, according to data from the Association of British Insurers (ABI).
The body said rising theft and repair costs are continuing to have an impact on premiums.
The average cost of motor cover across 2024 was £622 – 15%, or £78, higher than 2023.
But there have been signs of insurance costs for drivers edging down in recent months.
The average price paid by motorists for cover in the final quarter of last year was 2%, or £14, lower than at the start of the year.
The typical cost paid for cover in the final quarter of last year was £621, down from £635 in the first quarter of 2024.
Total claims payouts for privately-owned cars were 17% higher in 2024 compared with 2023, according to the ABI, and the highest since it started collecting the data in 2013.
Our latest data paints a difficult picture for drivers and the industry alike
During 2024, insurers dealt with 2.4 million motor insurance claims, paying around £4,900 per claim on average across the year and a record average high of £5,300 in the final quarter of last year.
Vehicle repair costs totalled £1.9 billion in the fourth quarter of 2024, taking the yearly total to £7.7 billion – another record high and £1.5 billion more than the total for the year 2023, the ABI said.
The ABI has previously set out a “road map” with suggested steps that the industry and government can take to tackle insurance costs. It said it will continue to collaborate with members, partner organisations, regulators and the Government to build on progress.
The ABI said tackling skills and capacity challenges in the vehicle repair sector and improving the UK’s roads would also be steps that could help combat high costs.
Mark Shepherd, head of general insurance policy at the ABI, said: “Our latest data paints a difficult picture for drivers and the industry alike. Through our 10-point road map, 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.”
He said it is “vital” that insurance premium tax (a tax paid by insurers which feeds into prices paid by consumers) is not increased, adding: “We look forward to continuing to work with the Government and wider sector to help support drivers and tackle claims costs.”
