Constantly mending damaged roads, rather than dealing with potholes in a "planned and cost-effective way" is "nonsensical and costly to the country", AIA chairman Alan Mackenzie said.
Lincolnshire's roads will get a £6.5m boost to deal with potholes.
Lincolnshire County Council has announced it will invest the money over the next two years.
Leeds City Council has paid out more than £600,000 compensation claims caused by potholes in the last five years. More than 1,600 claims were lodged during that time - but only a fraction have actually been settled.
Last year, 355 claims were made by drivers for personal injury claims or car repairs - but only 55 have been settled. In 2010, one injury claim attracted more than twenty six thousand pounds.