There's bad news for drivers – car insurance looks set to rise.

Experts predict average car insurance premiums could increase by up to £75 this year following a government decision over how personal injury payouts are calculated.

Payouts for people with life-changing injuries are expected to rise sharply because the government has changed the way it calculates compensation sums.

Experts say the move will affect financial awards given to victims of medical negligence, car crashes and other incidents.

It will be the insurance industry – and ultimately us drivers – who pick up the bill.

Huw Evans, director general of the Association of British Insurers, called the decision “crazy” and “reckless in the extreme.”

He added: “Claims costs will soar, making it inevitable that there will be an increase in motor and liability premiums for millions of drivers and businesses across the UK.

“We estimate that up to 36 million individual and business motor insurance policies could be affected in order to over-compensate a few thousand claimants a year.”

The decision will have a knock-on effect on public services with personal injury liabilities such as the NHS, which saw clinical negligence costs rise from £1.2 billion in 2014/15 to £1.5 billion the following year.