UK insurers paid out a record £6.1 billion in property claims in 2025, according to the Association of British Insurers, with weather-related claims specifically reaching £1.2 billion, a 14% increase on 2024.
Within that total, domestic subsidence payouts hit £307 million, up 10% year on year and the highest level on the ABI's records, driven by the UK's hottest and driest spring on record in 2025 and a summer that compounded the ground-drying effect on clay soils.
Storm damage to homes reached £244 million, up 32% on the previous year, with the average storm payout rising to £2,450. Flood claims saw an even sharper increase: the average homeowner flood payout surged 60% to £30,000, even as overall home insurance premiums fell slightly, with the average combined buildings and contents policy costing £379 in the final quarter of 2025, £14 lower than the same period in 2024.
Chris Bose, the ABI's director of general insurance policy, said the figures show both the scale of the damage being inflicted and the vital role insurers play in helping people and businesses recover.
The Environment Agency's most recent national flood risk assessment found 6.3 million homes and businesses in England already sit in areas at risk of flooding, from rivers, the sea or surface water, a figure the agency expects to rise to around 8 million by the middle of the century.
The updated assessment, which uses more precise climate modelling than previous versions, found the single biggest driver of that risk is neither rivers nor the coast, but sudden surface water flooding caused by intense summer downpours, exactly the kind of localised, hard-to-predict event that has become more frequent as the climate warms.
British Geological Survey research published in 2026 found subsidence risk from clay shrink-swell, where soil expands when wet and contracts when dry, is heavily concentrated in specific parts of the country, particularly London's northern and central boroughs, including Camden, Islington and Barnet, alongside Kent in the southeast.
Under a medium emissions scenario, BGS projects that more than a quarter of London properties will be highly or extremely likely to be affected by shrink-swell subsidence by 2070, rising to more than half of properties under a higher emissions scenario, with over 2.5 million properties in the capital already falling into the higher-risk category today.
That risk is already showing up in claims data beyond the ABI's national figures. Separate reporting has found London subsidence claims reached a fresh record last quarter following the region's fifth successive heatwave, with average household claims reaching £20,000, a 15% increase on the same period in 2025.
Beyond flooding and subsidence, parts of England's coastline face a genuinely different hazard -- land loss through erosion rather than water damage to an otherwise intact structure. Stretches of the East Riding of Yorkshire coastline, including Holderness, erode at average rates of several metres a year, with individual cliff-loss events well in excess of that in undefended locations, among the fastest average coastal erosion rates recorded anywhere in northwest Europe.
In North Norfolk, updated coastal modelling now allows projections of erosion risk out to 2055 and 2105, with local authorities already planning for communities affected by ongoing coastal change, a risk that has moved beyond modelling into practice.
None of these risks, flooding, subsidence or coastal erosion, are evenly distributed even within a single town or county. BGS's own subsidence modelling explicitly factors in variables including local geology, nearby tree cover, building age, drainage and number of storeys, meaning two neighbouring homes can carry meaningfully different risk profiles depending on their specific construction and position, not just their postcode.
That granularity is precisely why national and regional statistics, while useful for understanding where risk is concentrated, cannot substitute for a property-specific assessment before purchase or renewal.
Taken together, the ABI's claims data and the Environment Agency's and BGS's forward-looking risk assessments describe a market where the underlying hazards, flood, subsidence and coastal erosion, are each becoming both more severe and more precisely mapped at the same time.
That combination cuts two ways for the insurance sector: better data means underwriters can price and manage these risks with more precision than a decade ago, but the same data also makes it harder to treat any of these hazards as a rare, one-off event rather than a structural and growing feature of the UK property market that premiums, policy availability and long-term underwriting strategy will need to keep adjusting to.
