Property insurance payouts in the UK reached £6.1 billion in 2025, the highest annual total on record, according to recent data by the the Association of British Insurers (ABI), with total claims increasing by £400 million, or 7% year-on-year.
Payouts reached £1.5 billion in 2025’s final quarter alone, as adverse weather events continued to drive up claims costs.
In comparison, total property claims in the fourth quarter of 2024 were £1.6 billion, taking claims to a total of £5.7 billion for the year, the previous annual record.
In total, insurers paid out £1.2 billion for property claims resulting from adverse weather throughout 2025, marking a 14% increase (£142 million) compared to the amount paid out in 2024.
These weather-related claims covered domestic, commercial, and business interruption policies.
Weather-related damage to homes and possessions constituted £758 million of this total. This category of weather claims encompasses damage resulting from storms and flooding, as well as damage caused by frozen or burst pipes and the escape of water.
Extreme weather’s impact went beyond storms and flooding, significantly raising subsidence claims. Following the UK’s hottest summer on record in 2025, as recorded by the Met Office, conditions leading to ground shrinkage saw domestic subsidence payouts hit a record high of £307 million, a 10% (£27 million) year-on-year increase.
In 2025 insurers paid out almost £3.4 billion across more than 560,000 home insurance claims. The average claim increased by 15% year-on-year, rising by almost £800 to £6,000.
The latest premium data from the ABI shows:
- In Q4 2025, the average price of combined building and contents home insurance was £379, £14 lower compared to the same period in 2024.
- In the same period, the average cost of buildings-only insurance fell to £312, from £323 in the fourth quarter of 2024.
- The average price of contents-only insurance in Q4 2025 was £122, £14 lower compared to the same period in 2024.
Chris Bose, Director of General Insurance Policy at the ABI, said: “Once again, we’re seeing the toll that increasingly severe weather is taking on homes and businesses across the UK. A record £6.1 billion in property claims last year shows both the scale of the damage and the vital role insurers play in helping people recover.
“Government action is essential to protect communities from the growing impact of extreme weather. This includes stronger planning rules to stop building in high‑risk flood areas and designing homes with resilience in mind.”
