Car insurance premiums have certainly hit the fast lane, shooting up by 3.5% over the past three months and rising by a massive 11% over the past year, according to the latest figures from the AA British Insurance Premium Index.

The average premium for comprehensive car cover rose by 3.5% to £778.13 between April and June, with premiums rising at their fastest rate for nearly a decade. The average quoted for third party, fire and theft insurance, rose by 4.6% over the quarter to £968.22.

The AA said that theft, fraud, personal injury claims and legal expenses are all contributing to increasing costs. Personal injury claims and their associated legal expenses rose are expected to hit £10.9bn by 2012. Whiplash injury alone represents around £66 for every car insurance policy sold.

Simon Douglas, director of AA Insurance, also said that price comparison websites were misleading the public by suggesting that premiums were staying static. He said: "The fact remains that underlying premiums are rising more steeply than they have since 2000 because of rising costs.

"There's no getting away from the fact that the industry continues to suffer underwriting losses, which are predicted to be in excess of £240 million this year. Customers are being tempted by cheaper quotes that offer lower levels of cover with high excesses so it is really important that they talk to their insurer to make sure that the cover meets their needs before they buy."

Douglas went on to say: "I don't see the pressure on premiums easing. Over the past three months more than 90 per cent of quotes in the AA Index added £5 or more to their premiums and only 2 per cent fell. During the previous quarter, 20 per cent had reduced their premiums.