The latest data from the Association of British Insurers (ABI) shows that UK property insurance claims will reach 6.1 billion pounds in 2025, the highest annual total in history, with total claims increasing by 400 million pounds, or 7%, year-on-year.
Payouts are expected to reach £1.5 billion in the final quarter of 2025 alone as severe weather events continue to drive up claims costs.
This compares with property claims totaling £1.6bn in the fourth quarter of 2024, taking full-year claims to £5.7bn, a record for the previous year.
In total, insurers will pay out £1.2bn for property claims caused by severe weather in 2025, a 14% increase on the amount paid out in 2024 (£142m).
These weather-related claims are covered under home, commercial and business interruption policies.
Of this, weather-related damage to homes and property amounted to £758 million. Such weather claims include damage from storms and flooding, as well as damage from frozen or burst pipes and leaks.
The effects of extreme weather are not limited to storms and flooding, but also significantly increase subsidence claims. According to Met Office records, domestic subsidence spending hit a record high of £307m in 2025, a 10% year-on-year increase (£27m) as the UK experienced its hottest summer on record, causing ground contraction.
In 2025, insurers paid out almost £3.4 billion on more than 560,000 home insurance claims. The average claim value increased by 15% year-on-year, rising by almost £800 to £6,000.
The latest premium data from the ABI shows:
- The average price of buildings and contents home insurance in the fourth quarter of 2025 was £379, which was £14 lower than in the same period in 2024.
- Over the same period, the average cost of buildings insurance alone fell to £312, from £323 in the fourth quarter of 2024.
- The average price for contents insurance only was £122 in the fourth quarter of 2025, £14 lower than in the same period in 2024.
Chris Bose, general insurance policy director at ABI, said: “Once again we are seeing the toll that increasingly severe weather is taking on homes and businesses across the UK. Property claims reached a record £6.1bn last year, demonstrating both the scale of the losses and the important role insurers play in helping people recover.
“Government action is vital to protect communities from the increasing impacts of extreme weather. This includes tougher planning rules, stopping building in high-risk flood areas and designing homes with resilience in mind.”