The average motor premium in the United Kingdom has remained nearly flat in the first quarter of 2026, increasing by just £1 compared to the previous quarter, according to the Association of British Insurers (ABI). However, the cost of vehicle repairs continues to climb, raising concerns among insurers.
Premium Stability
The ABI reported that the average premium paid for motor insurance in Q1 2026 was £560, a marginal increase from £559 in the final quarter of 2025. This figure is also £20 lower than the £580 average recorded in the first quarter of 2025, indicating a year-on-year decline.
Rising Repair Costs
Despite premium stability, insurers paid out £2.9 billion in claims during the first three months of 2026. Of this total, £1.9 billion was allocated to vehicle repairs, representing a 3% increase compared to the fourth quarter of 2025. The average cost of an accidental damage claim rose to £3,699, an 8% jump from the previous quarter.
The ABI attributed the rising repair costs to higher parts prices and the increasing complexity of modern vehicles. Additionally, longer repair times—often due to supply chain disruptions—have contributed to higher expenses, including costs for courtesy car hire while vehicles are being fixed.
Industry Response
Chris Bose, director of general insurance and international at the ABI, commented: “It’s encouraging to see motor insurance premiums have remained stable in the first three months of this year, underlining the industry’s efforts to tackle costs. However, the sustained high costs of repairs continue to be a concern. Working with our members and Government, we’ll maintain momentum to drive forward the work of the Motor Insurance Taskforce to support motorists.”
The ABI continues to monitor the situation and collaborate with stakeholders to address the underlying factors driving repair cost inflation.
