The Impact of Advanced Driver-Assistance Systems (ADAS) on Car Insurance Premiums

You’re on the highway and can keep your hands off the wheel and maintain pace and distance with the car in
front. You can thank Advanced Driver-Assistance Systems (ADAS) for essentially saving your life there and making trips a bit easier — and, in reality, safer. But beyond the convenience and roadway safety, are ADAS good for car insurance and insurance rates or premiums?

The Rise of ADAS

ADAS are integrated systems of electronics that help conduct multiple tasks on the road, which are meant to assist the driver during the driving process. Some cars now come with Adaptive cruise control, Lane departure warning and Automatic emergency braking. These systems can detect the world around it and correct things to avoid a potential accident.

Safety Benefits

The obvious upside to ADAS is that it makes the road fundamentally safer. Vehicles with AEB features are in fewer rear-end accidents. Similarly, vehicles with forward collision warning and autobrake have fewer claims for front-to-rear crashes. Overall, crash rates are down, thanks to ADAS being used more frequently.

Impact on Car Insurance Premiums

Insurance is ultimately all about safety and risk. Safe cars mean fewer insurance claims, which could result in fewer payments and may lead to reduced insurance premiums. Insurance for new cars with advanced safety features is set to drop for the first time after brokers adopt the new Vehicle Risk Rating system, which considers features that decrease crash risks and may result in lowering insurance costs.

Repair Costs and Other Considerations

While, in theory, reduced crashes are a recipe for lower insurance premiums, the cost of repairing or replacing these systems can get pretty high. This is typically due to the cost of labor and the parts themselves, such as small sensors and cameras that are encased in critical areas of the vehicles, such as the bumper or windshield. The cost of replacing these features can sometimes be so high that they outweigh the cost of how much your insurance rates or premiums go down after a crash.

If you’re in the market for a car with ADAS, we would still recommend speaking to your insurance agents as well. Some companies may still offer discounts; however, some may not have integrated them into the rating process yet.

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