Police have not been investigating all house burglaries for some time, despite an onus on policyholders to report them immediately, says the ABI.
The ABI was commenting on a reported announcement by the Metropolitan Police that it would automatically investigate only "serious crimes".
Other crimes, such as burglary, would only be investigated if they were "deemed solvable using proportionate resources".
An ABI spokesman said: "Obviously, in an ideal world we'd want maximum resources on burglary investigations, but the reality is that for some time the police have had to put their resources where they're most needed, on serious crime."
Last week Insurance Times reported that police ignored the agreement to exchange information with insurers, hammered out by the ABI and the Association of Chief Police Officers in October 2002.