The report highlighted that the average quoted premium for an annual comprehensive car insurance policy, as tracked by the AA Shoparound summary, is £746.75. 

This is a fall of 1.4% over the first three months of 2013. Over the past year, premiums have fallen by 4.1%.

Simon Douglas, director of AA Insurance, said that the falling trend will be welcomed by consumers who, over the past three years, have faced some of the biggest premium increases ever recorded by the Index.

“Car insurance has not been far from the headlines for all the wrong reasons as insurers struggled to balance premiums against claims costs,” he says.

“Sharp hikes in personal injury claims, fraud and uninsured drivers, to say nothing of last year’s gender directive and changing regulations, have all helped to pile on the pounds.

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Scott Kelly, head of motor at Gocompare.com, said: “There is a lot going on in the car insurance market at the moment with the after effects of the EU Gender ruling still working through renewal quotes and moves to curb the cost of personal injury claims. As a result, individual insurers will vary a good deal in the way they assess different risks.

“It is important therefore that drivers step back and take the time to compare prices. Premiums have stopped rising but that doesn’t guarantee that everyone is suddenly getting a good deal.

“You don’t want to be signing up for another year with your existing insurer if they are increasing your premium when another company might have a totally different view.”

The Government is currently investigating what the AA calls ‘the very British phenomenon of soaring whiplash injury claims’, with the Ministry of Justice finishing off a consultation on whiplash injury.

Motor groups are hoping that further reforms will be made to bring the number of whiplash injury claims under control, pointing out that 70% of those in crashes on Britain’s roads make a claim for injury even if no injury has been suffered, amounting to some 570,000 claims per year, costing £2bn.

Kelly said: “The industry is starting to tackle the issue of personal injury claims and our own research revealed that it is making inroads in terms of educating drivers.

“Two thirds of people now accept that making claims for minor injuries pushes up insurance costs for everyone. However, the underlying ‘compensation culture’ in the UK is deeply entrenched and there is a core of individuals who still believe it is acceptable to lie to insurers and make-up claims.

“We found that 6% of motorists admit they would still make a personal injury claim even if they weren’t badly injured, while a quarter of Brits say they would lie to their insurer if it meant they got a cheaper premium.”