The bill for vehicle repairs in the UK, including third party claims and widescreen damage, was £1bn between April and June this year the highest quarterly figure on record.
That is according to new data from the Association of British Insurers (ABI), which shows the average cost of repairs has risen by 33% over the last four years to £1,770.
This is thought to reflect the increasing complexity of technology now incorporated in vehicles, as well as the weaker pound making it more expensive to buy spare parts following the Brexit vote.
"Cost pressures continue to dominate the motor insurance market," ABI head of motor and liability, Rob Cummings, said. "We need the best possible Brexit deal to help ensure availability of vehicle parts."
The data shows that the average claim jumped to £2,839 in the second quarter of 2017, up 6% on the same period last year, as a result of these cost pressures.
It was also found that the number theft claims rose to nearly 13,000 - the highest quarterly level since early 2013 - as high-tech devices enable thieves to steal cars without forcible entry.
The cost of these claims was £68m in the second quarter of this year, 21% more than over the same period in 2016.
In addition, the data shows that one-off changes in reserving to comply with Solvency II requirements, and more reinsurance ceded, contributed to a fall in net premium income and an overall underwriting loss of £194m in 2016.
However, the commercial motor market remained buoyant, recording a profit for the second year in a row at £96m.
It is now hoped that cost pressures may start to ease for insurers following the government announcing measures to change the discount rate, estimating that it is likely to fall between 0% and 1%.
This comes after the rate was changed from 2.5% to -0.75% in February, with the decision subsequently criticised for raising motor insurance premiums, and potentially costing insurers up to £3bn.
"These figures further highlight why the government needs to act to help relieve unnecessary industry costs," Cummings said.
"The announcement to introduce legislation to reform the discount rate should help, but it's also important the government effectively implements whiplash reforms, and there are no further hikes in insurance premium tax."