Fully comprehensive cover now typically costs £704, an "unprecedented" increase of 31% from a year ago.
AA Insurance director Simon Douglas said: "The AA has been tracking the quarterly movement of car insurance premiums across the country for 16 years and premiums are now rising at their fastest ever rate.”
Are we becoming more dishonest?
The recession is one reason why car insurance fraud has jumped, with cash-strapped consumers pushed to desperate levels to get their hands on some extra money.
Association of British Industry figures for last year reveal that over 2,000 dishonest insurance claims worth more than £16 million were detected every week.
And recent research from moneysupermarket.com shows that 15% of motorists under 35 would consider staging a motor accident to claim on their insurance.
Even more worryingly, one in 20 younger drivers admit they have already done so - and got away with it.
Steve Sweeney, head of car insurance at moneysupermarket.com, said: "We have all been affected by the recession in one way or another, but crashing for cash is not only illegal, it also wilfully endangers the lives of others.
"Nevertheless, our research reveals there are many more motorists causing this type of fraud and getting away with it.”
Insurers fight back
Increasing premiums is not the only way the insurers are fighting back against the wave of fraudulent claims.
Online firm swiftcover.com is set to become the first company in the UK to automatically check the claims histories of motor insurance applicants after finding that as many as 10% of applicants do not disclose all of their previous claims.
The company’s claims data indicates that drivers who cover up their claims histories are more likely to make more insurance claims in the future, with many of them attempting to make fraudulent claims.
It estimates that this type of insurance fraud costs it up to £1million a year in lost premiums, pushing up costs for law-abiding drivers.
Steve Gaywood, swiftcover.com's counter fraud and compliance manager, said: "It is not fair that safe, law-abiding drivers should pay higher premiums to subsidise people who lie about their previous claims to get cheaper insurance.
"Once our new system is in place, some drivers who have tried to cover up their claims history and got a lower quote as a result may decide not to use swiftcover.com when the correct premium is calculated.
“However, we are determined to crack-down on people who try and buck the system as this will help us keep insurance costs lower for drivers who are open about their claims history and circumstances."
I have claimed on my motor insurance in the past. How can I find the best deal?
The danger of lying about your claims history is that you may well face higher premiums if you are caught – especially with motor insurers on their guard against all types of fraud.
The best idea is therefore to 'fess up to your previous crashes when looking for a new deal.
Don’t just make a claim automatically every time you have a minor accident, though.
Most motor insurance claims knock two years off your no-claims discount – often adding more than 50% to the price of cover during that time.
Experts therefore advise drivers to protect their no-claims discounts by avoiding claiming for any damage under £500.
If you already have claims on your recent record, then the best way to find the cheapest deal is to shop around through moneysupermarket.com to see which insurers are offering the best prices for drivers in your position.
Other easy ways to keep costs down include adding another named driver – with a clean record - to your policy, and taking the Pass Plus course to prove you are a good driver.
These courses can cost about £150, but you will soon recoup the outlay, as most insurers will offer discounts of around 30% to drivers with the qualification.
I have a flawless record. Can I avoid being hit by rising premiums?
If you have the choice, it may prove sensible to compare the car insurance market and take a new car insurance policy out sooner rather than later.
This is because premiums are likely to continue going up over the coming months, rather than coming down again.
While Aviva and RSA, for example, have imposed double-digit increases in motor premiums in recent months, both have also warned of further rises to come.
Other ways to reduce your premiums include taking the Pass Plus course mentioned above and taking measures to protect your vehicle from thieves – such as parking it off the road and installing a recognised alarm system.
You may also find that altering your job title – while keeping it legitimate – has an impact on the quote you are given.
If you are a solicitor, for example, try putting lawyer in instead to see what happens.
I am angry that fraudsters are pushing up my insurance costs. Why shouldn’t I just do the same?
The idea of some free cash from your insurer may be appealing, while knowing that others are getting away with fraud while you are paying higher premiums is certainly frustrating.
However, experts warn that if you stage a car accident and are found out, it will have drastic, long-term consequences on your life.
An official "fraud mark" could be added to your license, for example, prompting your insurer to void your existing policy and refuse you cover in the future. The insurers involved are also likely to pass your details to the police for prosecution.
Sweeney added: "Regardless of how tempting it may seem to get your hands on some extra cash, carrying out organised motor fraud really isn't worth the risk."
Meanwhile, as mentioned above, you will have to pay more for car cover if you are caught trying to pull the wool over your insurer’s eyes regarding your claims history.