Motorists are handing over 10p in every £1 they pay in car insurance premiums to personal injury lawyers, a trade body has said.

The high legal costs involved in settling personal injury claims following road accidents are adding an average of £40 a year to the cost of motor insurance, the Association of British Insurers (AIB) said.

The group, which analysed more than 50,000 low value personal injury claims, found that the cost of legal fees was nearly doubling the amount insurers had to pay out.

It found that while the average personal injury claim following a road accident was £2,430, insurers had to pay a further £2,100 in legal fees.

Overall, for every £1 in compensation that insurers pay for claims valued at under £5,000, an additional 87p is handed over to the legal profession.