UK property insurance claims hit record £10,000 average as subsidence surges

By The Financial Edition · 2 November 2026 · 11:00 GMT · Insurance Business UK · 1 min read

Claims Costs and Subsidence Surge

The average home and business insurance claim reached a record £10,000 in the third quarter of 2026, according to the ABI's latest Property Insurance Tracker. Total payouts by insurers rose 1% to £1.5 billion across July, August and September, even as the total number of home and business claims fell 4% to 142,000. ABI members received 13,000 new domestic subsidence claims in Q3 2026, up from 8,000 in the same period in 2025, marking the highest quarterly figure on record following what the Met Office provisionally identified as the hottest UK summer on record. The average insurance payout for subsidence damage held at a record £20,000 for the second consecutive quarter.

Perils and Premium Stability

The average domestic fire claim reached its third highest quarterly level on record at £38,000, while the average domestic flood claim cost £28,000. Meanwhile, the average annual home insurance premium for Q3 2026 was £329, which is unchanged year on year though up £4 from Q2. Combined buildings and contents policies averaged £389, up £3 year on year, whereas buildings-only premiums fell £13 year on year to £310 and contents-only policies fell £7 to £118.

Why it matters

The divergence between falling claim volumes and rising average claim payouts highlights a potential adequacy gap for property clients who have not updated their sums insured to reflect current material and labour costs.

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