Auto insurance premiums rose by as much as 20 percent in the Washington area during the last year and will rise by another 10 percent here and across the country this year, insurance companies and industry groups report.

Based on rate information provided by seven major insurers in the area, rates for passenger cars rose by an average of 8.6 percent in D.C. last year, 14.5 percent in Maryland and 9.7 percent in Virginia.

Insurance companies say they have no choice but to raise rates in the face of escalating liability, medical and car repair costs.

Critics say the companies are "price gouging."

Jay Angoff, counsel to the National Insurance Consumer Organization, said, "The companies are beginning to gouge individuals just as they have been gouging commercial accounts for the last year in an effort to pressure state legislators to restrict the right to sue."

The industry as a whole says it has been losing money on car insurance since 1982, despite an average increase in auto premiums of 12 percent in 1985, up from a 7.9 percent increase in 1984.

"The industry is losing 3 cents on every dollar" that it takes in, said Sean Mooney, executive vice president of the Insurance Information Institute, an industry trade group. "Car insurance rates will rise about 10 percent this year on average because we are losing money.

"These above-average increases are due to rising accidents, above-average increases in medical care, and the lawsuit crisis."

Angoff disagrees that lawsuits are responsible for the higher rates. He said the insurance industry is spending $6.5 million on an advertising campaign to "shift the public's focus away from insurance company price-gouging to scapegoating the legal system."

Noting that the Virginia legislature is studying the issue of capping damages that can be paid out in commercial liability suits and that bills have been introduced in Maryland to limit medical malpractice damages, Angoff said the insurance industry "started with doctors, and they are not going to stop until it affects every individual."

The companies point to the mounting price of settling damage claims. "We're seeing an increase in the frequency and severity of liability claims," said Micaela Woodbridge, spokeswoman for Aetna Life & Casualty Co. "Awards are getting farther and farther from the economic cost of the liability."

Earl Rinker, assistant vice president of regional operations at GEICO Corp., said, "The rising cost of repairs and severity of losses, and the frequency with which losses occur are impacting on rates." Even falling gasoline prices pose a threat, Rinker said, noting that lower prices will encourage more and faster driving, and therefore more accidents.

Consequently, most insurers say their rates will continue to rise far faster than the cost of most other goods and services.

A rise in rates is "a certainty," said Myron Dye, an associate actuary for United Services Automobile Association.

"We really had a bad year in 1985; we are used to breaking even, and we didn't even come close to that in 1985," Dye said. The company underwrites car and home insurance for military officers and their families.

Bob Sasser, spokesman for State Farm Insurance Cos., said, "With the kind of losses we've had, it's reasonable to expect more rate increases in 1986. This is a cycle where they are going up quite sharply."

Insurers do not need approval of regulators in Virginia and Maryland to raise rates on most auto insurance policies. The District does require prior approval.

State officials in Maryland, Virginia and the District give varying estimates on the recent increases in premiums. Pete Synnott, state deputy insurance commissioner for Virginia, estimated that car insurance rates went up between 10 and 20 percent in that state. He added that the number of complaints about rising rates for all types of insurance has "gone up dramatically."

The Maryland insurance commission said about 100 complaints had been filed in recent months about rising car insurance rates. "Most people are complaining they had no accidents, but the rates are going up," one official said.

James Montgomery of the D.C. Insurance Administration estimated that rates had risen somewhat less than 10 percent, with the number of complaints not up sharply.

On an individual basis, some of the companies either would not, or could not, immediately provide information on specific losses for car insurance lines.

A. M. Best Co., a data-gathering, rating and publishing company concentrating on the insurance industry, said companies received $46.6 billion from premiums for passenger cars in 1985, but lost $5.1 billion. The company estimates the industry paid out $1.10 for losses, underwriting expenses and dividends on every dollar earned.

The industry as a whole invests premiums it earns to generate additional interest income. When interest earnings of about 7 cents on every dollar invested also are taken into consideration, the industry is losing 3 cents on the dollar, Mooney said.