Motor insurance premiums have risen 8% since the first quarter of 2016, taking them to their highest level since 2012, the industry has warned.

The Association of British Insurers (ABI) says "cost pressures" including whiplash claims, Insurance Premium Tax, rising repair bills and the changes to the 'discount rate' (which determines how accident compensation is calculated) have seen the average premium rise by £34 a year to reach £462.

And it's warning that costs are likely to rise further this year as insurers face bigger payouts to those seriously injured in road accidents, and Insurance Premium Tax rises from 10% to 12 % in June.

The ABI is now lobbying the Government to "strike the right balance between the interests of claimants and consumers".

ABI assistant director Rob Cummings said insurers are "doing all they can to ensure that motorists get the most competitive deals possible".

He added: "The industry can only do so much though, and it is important that whichever party is in government after the election, they commit to measures to help lower the cost of car insurance.

"Whatever the outcome, the new government must push ahead with reforms to tackle low value whiplash-related claims and introduce urgent reforms to change the framework for setting the discount rate."

Check NOW if you can lock in a cheap deal

Many are overpaying already, especially those who just auto-renewed. New rules which came into effect on 1 April mean insurers are now forced to tell you what you paid last year when writing to you with an auto-renewal quote, highlighting how much they hike costs from one year to the next.

So check now if you can cut your costs and lock in to a cheap deal to beat price hikes. Here's what to do, depending on how close you are to renewal:

  • If you're at renewal, it's easy – NEVER automatically accept your renewal quote, just use our car insurance system to bag the cheapest deal.
  • If your renewal's within 60 days, then some insurers let you get a quote before your renewal's due and keep that price, meaning you'll beat the hikes if prices rise.
  • Even if you're midway through your policy, it's worth checking if you can save – for a £50ish admin fee (factor that in) you can usually cancel your existing policy and get the rest of the year refunded, provided you've not claimed.

To find the cheapest policy, use the system set out in full in our Cheap Car Insurance guide – in brief:

  • Combine comparison sites to speedily find your cheapest deal before hikes hit. There's no one cheapest insurer, as prices are different for everyone.
  • Then check the biggies comparisons miss. Direct Line* and Aviva* won't appear on comparison sites, and can be competitive.
  • Then check the hidden hot deals comparison sites miss, eg, £60 M&S voucher. See our full list of current hot deals.