Changes in the law will help insurance costs continue to fall, according to the AA.

The average quoted premium for a 12 month comprehensive car insurance policy is £746.75 – a fall of 1.4% for the first quarter of 2013. Over the past year premiums have fallen by 4.1%

The figures come from the AA Shoparound index which averages the five cheapest quotes from a range of premiums from insurers and brokers, as well as from price comparison sites, against a fixed basket of risks.

Simon Douglas, director of AA Insurance, thinks the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) on April 1st will help the downward trend.

The act includes a ban on the payment and receipt of referral fees for any claim that includes a personal injury

There are further proposals to increase the small claims court limit, for personal injury claims where legal costs can’t be recovered, from £1,000 to £5,000.

Mr Douglas said: “These changes should go some way towards bringing no-win, no-fee type whiplash-injury claims under control, and will thus reduce the costs of claims.”

However information obtained by the Association of Personal Injury Lawyers (APIL) showed the number of Whiplash claims in the UK is currently at a five-year low with nearly 60,000 fewer claims last year.

Evidence gathered by APIL has now been submitted to a House of Commons Transport Select Committee inquiry into whiplash claims.

Matthew Stockwell, APIL president, said: “This debate has been mired in myth and hyperbole for far too long.

“Whiplash injuries are real, they are painful, and independent research has found that around one in five sufferers have symptoms lasting more than a year.

“That’s the reality. The fact that the Transport Committee is now taking a hard look at some of the myths is extremely welcome.”

In a separate initiative, insurance companies are expected to be allowed to cross-check car insurance applications against the DVLA database from next year to help reduce fraud.