UK insurers paid out £6.1 billion in property insurance claims during 2025, marking the highest annual total on record, the Association of British Insurers reported.
The ABI said £1.5 billion in claims were settled in the fourth quarter alone.
The figure extends an unprecedented trajectory. Insurers paid out £5.7 billion in 2024, itself a record year. The total has nearly doubled from annual levels between 2017 and 2020, when weather-related claims averaged approximately half current levels.
Weather damage accounted for £1.2 billion across 2025, a 14% rise of £142 million compared with the previous year. Residential properties and possessions comprised £758 million of the total.
Deloitte estimates weather-related claims reached £1.6 billion for 2025, representing 25% of total property payouts. The consultancy raised concerns about pricing adequacy as premiums are expected to decline in 2026.
The escalation marks a sharp departure from historical norms. The previous high came in 2007, when summer flooding generated an estimated £3 billion in insured losses.
Storm damage to residential properties reached £244 million in 2025, up 32% or £59 million year on year. The average storm damage payout increased to £2,450, up £750 from 2024.
Domestic flood claims rose 38% to £312 million, whilst the average flood payout jumped 60% to £30,000.
Chris Bose (pictured above), director of general insurance policy at the ABI, said the figures demonstrated "the toll that increasingly severe weather is taking on homes and businesses across the UK."
He called for government action, including planning rules to prevent building in high-risk flood areas and requirements for homes designed with resilience measures.
Elsewhere, the Met Office reported summer 2025 as the UK's hottest on record, creating conditions linked to ground shrinkage. Domestic subsidence payouts climbed to £307 million, up 10% or £27 million, reaching their highest level on record.
Insurers settled more than 560,000 home insurance claims totalling nearly £3.4 billion in 2025. The average claim rose 15% year on year, increasing by almost £800 to £6,000.
The equivalent average claim paid is now 72% more expensive than the third quarter of 2017, data shows.
Rising claims collide with declining premiums. The average price of combined building and contents home insurance fell to £379 in the fourth quarter, down £14 compared with the same period in 2024. Buildings-only insurance dropped to £312 from £323, whilst contents-only insurance averaged £122, down £14 year on year.
The pricing dynamic extends a loss-making streak. In 2023, property insurers paid out £1.18 in claims for every £1 received in premiums, following 2022's £1.22 payout ratio. EY forecasts 2024 marked the fifth consecutive year insurers paid out more than they collected.
Rebuilding costs also added pressure. The House Rebuilding Cost Index rose 21% in the two years to January 2024, research shows.
