Insurance companies operating in Northern Ireland blame the increase in personal injury claims for the premium hikes.
But there is something they don't tell the public: that some of them are locked in a money merry-go-round which actually encourages personal injury claims.
Here's how it works:
- If you are injured in an accident, your insurance provider can pass your details to a personal injury lawyer, or claims management firm, which will act as a 'middle man' and find a solicitor for you.
- In return, these middle men pay the insurer a referral fee - which can be as much as £900.
- If your claim is successful, the lawyer demands compensation for your injury from a third party insurer, as well as a bill to cover his own hefty fees.
- That third party insurer may have lost out this time, but he will be receiving referral fees from other lawyers, who are demanding payments from other insurance companies for other accidents.
The upshot of all this is that the claims management industry is raking it in courtesy of their fees - fees which have to be recovered through increased premiums.
Most claims management companies are, however, reputable, and provide valuable advice on where to get the right lawyer and thus receive proper compensation for genuine injuries.
But others use aggressive marketing techniques to pressure people into making a claim when they haven't been injured at all.
This type of persuasive, cold-call marketing isn't illegal, but there's little doubt it can encourage people to make fraudulent claims, and that underpins a growing problem.
Paul Hatty, Northern Ireland chairman of the British Insurance Brokers Association (BIBA), said there had been a "massive increase" in the number of personal injury claims made on the insurance industry.
He said: "What we're getting now is some claims management companies using aggressive marketing techniques to try and encourage people to make a claim.
"The financial benefits to companies from assisting in a personal injury case have tempted some companies into encouraging insurance fraud."
The cost of these fraudulent claims is more than £900m a year - which adds, on average, £40 to every UK motorist's premium.
Mr Hatty also said Northern Ireland needs to address the level of awards and high frequency of claims going to court, as our legal system has historically awarded higher sums to claimants.
"We understand that claims for serious neck injuries range from £30,000 to £265,000 here, whereas they range from £14,000 to £86,000 in Great Britain," he said.
"Also, 40% of claims go to court in Northern Ireland compared to just 3.5% in the rest of the UK.
"A third issue is that the amount claimed on car insurance here represents 5.4% of UK total claims, although we have only 2.6% of the total number of cars."