Insurance claims for floods and subsidence are rising as Britain’s climate causes extra harm

A combination of dismal weather and a long, hot and dry summer led to a sharp rise in home insurance payouts last year, with notable rises in claims for flooding, storm damage and subsidence.  

Insurers paid out £6.1billion in property claims last year, representing the highest annual rate on record, the Association of British Insures, said.

According to the ABI, the average storm damage payout in 2025 was £2,450, which is £750 more than in 2024. 

In the final quarter of 2025 alone, insurer payouts came in at £1.5billion, as ‘adverse weather’ across Britain continued to ramp up claims costs, the ABI said. 

Insurers shelled out £1.2billion in weather-related property claims in 2025, a 14 per cent, or £142million, increase on the previous year. 

Of the £1.2billion weather-related payout total, claims for damage to people’s property and possessions comprised £758million, the ABI added. 

Payouts: Dismal weather across Britain in 2025 led to a sharp rise in insurer payouts 

In 2025, damage to people’s properties as a result of storms reached £244million, marking a 32 per cent, or £59million, rise from the previous year. 

The ABI said the cost of domestic flood claims increased by 38 per cent to £313million, while the average flood payout to homeowners jumped ‘significantly’ to £30,000, a 60 per cent year-on-year increase. 

Earlier this week, the Environment Agency and Department for Environment, Food and Rural Affairs said more than 6.3million homes in England could be at risk of flooding.

Concerningly, claims for subsidence also increased last year, the ABI’s findings showed – and some of that is down to last year’s good summer.

The Met Office has previously reported that the summer of 2025 was the hottest on record in Britain. Hot conditions can increase the risk of ground and soil shrinkage. 

The ABI said domestic subsidence payouts among insurers rose to £307million in 2025, representing a 10 per cent year-on-year increase and the highest figure ever recorded by the industry body. 

Throughout the duration of 2025, insurers paid out £3.4billion for more than 560,000 home insurance claims. The average claim rose by 15 per cent year-on-year from £800 to £6,000, according to the ABI.  

Chris Bose, director of general insurance policy at the ABI, said: ‘Once again, we’re seeing the toll that increasingly severe weather is taking on homes and businesses across the UK. 

‘A record £6.1billion in property claims last year shows both the scale of the damage and the vital role insurers play in helping people recover’. 

He added: ‘Government action is essential to protect communities from the growing impact of extreme weather. 

‘This includes stronger planning rules to stop building in high‑risk flood areas and designing homes with resilience in mind.’

How much? According to the ABI, the average price of combined building and contents home insurance in the final quarter of 2025 was £379

How much did people pay for insurance last year? 

According to the ABI, the average price of combined building and contents home insurance in the final quarter of 2025 was £379, £14 lower compared to the same period in 2024.

In the final quarter of last year, the average cost of buildings-only insurance fell to £312, from £323 in the fourth quarter of 2024.

The average price of contents-only insurance in the fourth quarter of 2025 was £122, £14 lower compared to the same period in 2024, the ABI added.

Getting the best insurance policy

Living in an area at high risk of flooding or in a building at risk of subsidence will push your insurance premium up. 

‘Non-standard’ homes may not be uninsurable, but the number of insurance providers willing to cover your property will be reduced. 

Policy terms may also be stricter and you may have to track down a specialist insurer to ensure all your requirements are covered.

Start off using price comparison websites to determine if your higher-risk property can be covered. If you struggle to find an insurer, you can find a broker on the British Insurance Brokers’ Association website. The likes of Homeprotect, Intelligent Insurance and InsureMy should also be able to assist if you are struggling to find cover.  

If risk of flooding is the reason you are struggling to find decent insurance cover, Flood Re has a handy tool which lists insurers or brokers to try.

Some insurers may give you a small discount if you pay for your home insurance annually rather than on a monthly basis. As with any insurance, remember that the cheapest option may not offer you the best and most comprehensive cover.