This was the highest quarterly figure since the ABI started collecting data in 2013 and a 29% jump compared with the same quarter last year.
Within the total, the cost of vehicle repairs leapt by 46% annually to reach £1.5 billion, which was also the highest figure since ABI started collecting this data back in 2013.
The surge in repair costs reflects a range of rising costs for insurers, including energy inflation, labour rates and more expensive repairs, the association said.
The cost of providing replacement cars while vehicles are being repaired jumped by 52% to £157 million.
This reflects longer average repair times, meaning vehicles are often supplied for longer, the ABI said.
Payouts for vehicle theft, at £196 million, increased by 53% compared with the same period last year. This in part reflects increases in the average price of second-hand cars.
The latest quarterly total overall equates to around £28 million being paid every day to help motorists, the ABI said.
ABI released its latest insurance premium tracker in August, which found that the average price paid for motor insurance had surged by just over a fifth (21%), or nearly £90 in cash terms, annually, to reach the highest levels since records started in 2012.
The average premium paid for private comprehensive motor insurance in the second quarter of 2023 was £511.
Back in the second quarter of 2022, the average price paid for motor insurance was £88 less, at £423, according to the data released in August.
It can still pay to shop around to get the policy that best meets your needs at the most competitive price
The ABI said on Tuesday that the overall number of claims settled between April and June, at 592,000, was up 18% compared with the second quarter of 2022.
As part of the overall payout figure, insurers paid out £602 million in personal injury claims in the second quarter of this year, a figure which decreased by 8% compared with the second quarter of 2022.
Indications are that whiplash reforms introduced in 2021 to create a simplified, fairer, more efficient, and cost-effective compensation system are having an impact, the ABI said.
Laura Hughes, ABI’s manager, general insurance, said: “Motor insurers continue to deliver when motorists and personal injury claimants need them the most. Despite facing sustained cost pressures, motor insurers remain totally focused on supporting customers when the worst happens, and doing all they can to ensure competitively-priced motor insurance.
“With many families facing higher cost-of-living bills, anyone concerned about being able to afford their insurance should speak to their motor insurer to see what options might be available. And despite cost pressures, it can still pay to shop around to get the policy that best meets your needs at the most competitive price.”