Most drivers buy personal insurance and pay a premium based on their individual risk.
The Motability Scheme takes a different approach. We insure all vehicles in one policy, with the costs being shared across all customers. By insuring everyone together, the Scheme doesn’t assess individual risk, addressing a market failure in which disabled people cannot get or cannot afford insurance.
In recent years, insurance costs have risen due to inflation and an increase in incidents, and prices have increased for customers. We want to manage insurance costs to keep the Scheme good value for our customers, the majority of which have low incomes and rely on their vehicles. Addressing high risk and expensive insurance claims will lower costs for Scheme customers.
Fast facts
- Insurance costs on the Scheme have increased by 62% since the pandemic, compared to 49% across the wider UK market, driven by inflationary increases seen in the wider sector and an increase in claims
- The Motability Scheme spends around £1.4 billion annually on insurance
- Insurance now makes up over a third of the cost of a lease, on average
- Younger drivers are 70% more likely to make a claim than other Scheme customers
- Customers new to the Scheme are 45% more likely to make a claim than other Scheme customers
- Two thirds of the most serious insurance claims (>£5m) are linked to young or new-to-Scheme drivers
Insurance on the Scheme is fair and inclusive
Many disabled people face real challenges accessing affordable car insurance in the open market.
Almost half (48%) of disabled customers who have tried to access insurance privately say they have been quoted premiums they could not afford. More broadly, 29% of customers believe getting insurance would be difficult, with medical conditions or disability-related risk factors ranking high on the reasons.
The Motability Scheme provides access to mobility where the market has failed, including insurance.
To do this, all vehicles on the Motability Scheme are insured together under one shared policy, meaning every customer receives the same comprehensive cover as part of their lease.
This approach ensures customers are not priced differently based on risk proxies such as credit score, postcode, or personal circumstances, helping to make insurance accessible for people who may otherwise be excluded.
Insurance costs are rising on the Scheme
In the three years after the pandemic (2022-2024) insurance costs rose significantly – by 49% across the UK, according to ABI data, and on the Scheme by 62%.
While insurance costs have started to come down nationally, Scheme insurance costs continue to rise, driven largely by a rising volume of claims. Contributing factors include changes in the Scheme’s customer base, such as more new-to-Scheme customers and younger drivers under 30, who are more likely to be involved in accidents.
Accidents drive costs for everyone
Most Motability Scheme customers and their named drivers drive safely. However, as all customers are covered under the same insurance model, the cost of accidents is shared across the Scheme.
Data shows that customers in their first lease and drivers under 30 are much more likely to have an accident, particularly during the early stages of driving a new vehicle.
Reducing avoidable accidents is the most effective way to keep customers safe and protect affordability for all customers.
Two thirds of our largest insurance claims (>£5m), which result in catastrophic bodily injuries, have been caused by young or new to Scheme customers
Protecting affordability and independence
The Motability Scheme is focused on helping customers to travel safely, while ensuring the service remains affordable and sustainable for the long term.
By helping to reduce accidents and manage rising costs, the Scheme can continue to provide a reliable route to independence for disabled people across the UK.
To support this, the Scheme is introducing new ways to help customers build safer driving habits, particularly during their first lease. This included Drive Smart, which was introduced for higher-risk groups between September 2025 and May 2026.
Following customer feedback, we paused the introduction of Drive Smart while we review how it works for customers. Existing users can still choose to use the app voluntarily while we continue to improve the programme and work with customers to shape what happens next.
Alongside this, we continue to take steps to manage rising insurance costs more broadly. This includes changes such as increasing the insurance excess, as well as other measures to ensure the Scheme remains fair and affordable for all.
Without taking action to reduce the number of accidents, all Scheme customers will see the cost of their leases rise. This could result in the least risky leaving the Scheme, causing average insurance costs to rise and the most risky unable to afford it.
Find out more about how Drive Smart works and how it supports safer driving: Media factsheet: Drive Smart with the Motability Scheme
