More than a third of motorists have seen the cost of their car insurance rise by half this year.
It has prompted thousands of drivers to reduce their levels of cover in an attempt to manage their outlays, the AA said.
A third of drivers were being asked to pay an extra 50pc.
The AA warned that premiums for the State's two million drivers were set to continue to rise into next year unless major reforms were put in place by insurers and the Government.
An AA motor insurance survey of more than 5,000 car owners has revealed that 34pc had seen their premiums increase by between 20pc and 50pc when compared with 2014.
Another third of motorists surveyed said they were forking out up to an extra 20pc.
A quarter of policy-holders saw no change in the cost of their premiums.
AA Ireland chief executive Brendan Nevin said ordinary drivers were being asked to carry "an unacceptable burden".
"After a long period of cost stability, average prices have risen by almost 40pc since January 2014," he said.
"If the root causes we've identified are tackled head-on, we can quickly create a stable and sustainable market for motor insurance."
Fraudulent activity, high legal and claims costs, poorly resourced regulation, low levels of enforcement and a lack of industry transparency have cost motorists dearly, according to the AA.
Drivers will collectively have paid €300m in extra premium costs this year, the motoring body added.
The survey came as a shareholder meeting of insurer FBD heard accusations that the loss-making firm had "a culture similar to the Irish Farmers' Association".
The company had record losses this year.
Shareholders claimed that many of the same people involved in the IFA payments scandal have had a role in FBD.
But this was denied by FBD chief executive Fiona Muldoon.
"I don't believe there is a questionable culture," she said.
"I think the culture at FBD is a very proud culture. It's a very strong culture, it's a culture based around doing what's right."