Premiums rocketed by at least 11.5 per cent in the period April-June 2010 – the biggest increase since the AA started tracking insurance trends 16 years ago.
Policies sold through price comparison sites rose even more – by 12.7 per cent – while third party, fire and theft (TPFT) cover bought on these sites rose 17.1 per cent, AA Insurance said.
The "shoparound" index, based on the average of the cheapest three quotes, indicated that comprehensive cover went up 11.5 per cent to just under 704 in the last three months, with TPFT rising 15.9 per cent to just under 964.
Taking all the methods together, comprehensive cover rose 12.1 per cent to 980 while TPFT went up 15.8 per cent to 1,225.
AA president Edmund King said: "Last week's crime figures suggested crime levels were falling but crucially it missed a new 21st-century wave of fraud, such as providing false information and claiming for non-existent personal injuries, which just isn't being picked up."
He added: "It's now much easier to get an insurance quote online, for example, comparison sites can enable dishonest individuals to manipulate information to get a lower premium. Insurers are increasingly charging higher prices to these people to cover the increased fraud risk."
"For those shopping on comparison sites, average premiums have climbed by an eye-watering 32.8 per cent – or 193 – in just nine months.
"Last year, the cost of meeting claims exceeded premium income by 22 per cent and the spiralling increases we're seeing show that insurers are trying to fill that chasm."