Its data has revealed the average price paid for comprehensive cover during 2014 was £360 – down from £374 in 2013, and £409 in 2012.
However, during the final three months of last year the average crept up to £372, which the ABI said reflected that falling oil prices and other factors had increased car usage, in turn leading to more accidents and an increase in low-value insurance claims.
Last week, the AA reported average petrol prices dipped to their lowest level for five years, with unleaded at 108.91p.
This is a 7.41p dip on the mid-December figure and only 0.5p short of the second-biggest monthly fall recorded.
Changes to the way whiplash claims are dealt with could push down the cost of cover further.
The ABI said the introduction in April of independent body MedCo, charged by the government with overseeing the production of independent medical reports in whiplash claims, “should deter the cheats and ensure honest motorists continue to get competitively-priced motor insurance”.
Insurer Aviva said more needed to be done to reduce the number and cost of whiplash claims, adding that treating short-term whiplash injuries with rehabilitation instead of cash payments would cut premiums by an extra £32.
Click here for information about Lexelle’s range of added value products which provide enhanced levels of cover for existing motor insurance policy holders.