Insurers Pay Out £3.2 Billion as Average Car Cover Premium Hits £566, ABI Reveals

Insurance Renewal Papers comparing van and cars along with Keys.
Van insurance premiums rising fast
Insurance Renewal Papers comparing van and cars along with Keys.
Van insurance premiums rising fast
  • Motor insurers paid out a record £3.2 billion to customers in the second quarter of 2026, the Association of British Insurers reports, up 7% on the same quarter last year.
  • The average car insurance premium reached £566 in the quarter, up £6 on the previous three months, though £14 lower than a year earlier once inflation is taken into account.
  • The average payout on a settled claim rose to £4,900, and windscreen repair claims alone now average £283, up 7% on the previous quarter.

UK motor insurers handed customers a record £3.2 billion in the second quarter of 2026, according to new figures from the Association of British Insurers, the industry body that represents the vast majority of UK insurers and publishes quarterly data on what its members pay out and charge. The £3.2 billion figure is 7% higher than the equivalent quarter last year, and it sits alongside an average car insurance premium of £566, up £6, or around 1%, on the first quarter of the year.

That £566 average premium is the number that lands on a driver’s own renewal notice, and it is worth reading alongside the ABI’s second figure: in real terms, once general inflation is stripped out, the average premium is £14 lower than it was in the same quarter a year ago. Insurers are not shy about pointing to that comparison. An ABI director, Chris Bose, said the industry is working to keep premiums competitive and affordable for customers even as claims costs stay high, a line that reflects the tension in this data set: premiums are close to flat quarter on quarter in cash terms, and falling in real terms, at the same time as the amount insurers are paying out on claims keeps climbing.

Where the £3.2 Billion Actually Goes

The average payout on a settled motor claim reached £4,900 in the quarter, a 4% rise on the first three months of 2026. That figure covers everything from a minor bump repaired at a bodyshop to a total loss written off after a serious collision, and the ABI’s data does not break the £4,900 average down further by claim type in the summary released alongside the headline figures. What it does isolate is windscreen and glass claims, a category almost every driver will encounter at some point: the average windscreen repair or replacement claim now costs £283, up 7% on the previous quarter. Chip and crack repairs are usually far cheaper than a full replacement, so that average sits somewhere between the two, reflecting a mix of cheap resin repairs and full-screen swaps on cars with cameras and sensors built into the glass, which raise the cost of replacement considerably.

Every pound an insurer pays out eventually works its way back into premiums, which is the mechanism behind the gap between this quarter’s flat cash premium and the rising claims costs sitting underneath it. Insurers price a policy based on the claims they expect to pay across their whole book of customers, not just the individual driver renewing that month, so a rise in the average cost of a windscreen claim or a collision repair shows up gradually across everyone’s premiums rather than instantly on any single renewal.

The ABI’s quarterly release does not provide a regional or age-based breakdown of premiums or claims in the same summary, which limits how far this particular data set can be sliced by postcode or driver age. What it does confirm, from an industry body with access to data most individual price comparison sites cannot see, is the shape of the market at national level: claims costs are the primary driver of what insurers charge, more than any other single factor, and windscreen and glass claims are becoming a larger and more expensive category as more cars are fitted with advanced driver assistance sensors built into or around the windscreen.

Comparison-site price indices published by other providers in recent weeks have told a similar story from a different angle, tracking quoted prices rather than what insurers actually pay out or charge existing customers at renewal. The ABI figures are different in kind: they come directly from insurers’ own claims and premium data across the industry, rather than from quotes generated on a comparison website, and they cover both new business and renewals rather than only new quotes.

Can You Avoid It

Windscreen cover is the most immediately actionable item in this data. Most fully inclusive car insurance policies include glass cover as standard, but with a separate excess that can range from around £75 to £125 for a repair or replacement, charged on top of, or sometimes instead of, the main policy excess. Checking the exact glass excess on a current policy, rather than assuming it matches the main excess, can avoid an unpleasant surprise the first time a stone chip needs fixing. A small chip repaired quickly, before it spreads into a crack that forces a full replacement, is both cheaper to fix and less likely to affect a no-claims discount: many insurers do not count a small glass repair as a claim in the same way they count a full replacement, and it is worth asking an insurer directly whether that applies to a specific policy before assuming it does.

On the wider premium, the £14 real-terms fall the ABI reports at national level will not be felt equally by every driver. The average blends young and old, rural and urban, and every vehicle type together, and every one of those groups moves at a different pace. A driver whose own premium has risen this year, even as the national average eases in real terms, is not imagining it: individual pricing still depends heavily on claims history, postcode, annual mileage, and the specific car being insured, and any one of those can move a single renewal in the opposite direction to the national trend. A younger driver on their first policy, or anyone who has just made a claim, is far more likely to see a rise than the average driver the ABI figure describes: those individual factors carry more influence over a single quote than they do inside a national average built from millions of policies.

Shopping around at renewal remains the most reliable lever available to an individual driver. Insurers price new business and renewals differently, and a loyal customer who never compares quotes can end up paying more than a new customer for the same risk on the same car. Increasing a voluntary excess, where a driver can comfortably afford to pay more out of pocket if a claim happens, typically lowers the premium, though that saving should be balanced against the larger amount that would need to be found if a claim is actually made. Telematics or black box policies, which track driving behaviour and speed, can also cut premiums for drivers with a consistently steady style behind the wheel, and they tend to help younger drivers most: that group faces the highest starting premiums and has the most room to prove a lower personal risk than their age group’s average suggests, sometimes cutting a first-year premium by several hundred pounds once enough safe mileage has been recorded.

Finally, keeping a policy’s mileage estimate accurate counts at claim time just as much as at quote time. An insurer that discovers actual mileage significantly exceeded the figure declared at renewal can adjust a payout or, in more serious cases, decline a claim entirely. Updating an insurer when circumstances change, rather than waiting for the next renewal, is a small step that protects both the cover itself and the price paid for it.

Sources: Association of British Insurers (ABI), “Record £3.2 billion paid out to support motor insurance customers in Q2 2026,” abi.org.uk, published 30 July 2026.

Jarrod

Jarrod Partridge is the founder of Motoring Chronicle and an FIA accredited journalist with over 30 years of experience following motorsport and the global automotive industry. A member of the AIPS International Sports Press Association, Jarrod has covered Formula 1 races and automotive events at venues around the world, bringing first-hand insight to every race report, car review, and industry analysis he writes. His work spans the full breadth of motoring — from the latest EV launches and road car reviews to the cutting edge of motorsport competition.

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