Five motor insurers are planning to raise premiums to pay bills they face for accident victims' NHS treatment, according to claims manager Claims Plus.

The firm asked CGU, Royal and SunAlliance, Norwich Union, Cornhill, Zurich and the AA about their premium rates in light of the Road Traffic (NHS Charges) Act, which became law in April.

All but one agreed that premiums would have to rise to meet the claims on motorists' policies which NHS hospitals will make. Claims Plus calculates that a typical increase would be £10 a year.

In addition, two of the six insurers believed that the increased bureaucracy would slow down compensation claims.

Claims Plus director Lorraine Wright said that drivers need to brace themselves for premium inflation. “The Act means £100 million extra will have to be spent by the UK insurance industry. This money will have to come from somewhere, and it will be drivers who end up picking up the tab.”

The Act streamlines the procedures under which NHS hospitals can claim on the insurance policy of the motorist responsible for the accident. Previously, the bureaucracy involved meant that only £10-20m a year was collected.