ADAS & Your Car Insurance Cost

How Advanced Driver-Assistance Systems (ADAS) are Silently Inflating UK Car Insurance Premiums: The Hidden Costs of Modern Vehicle Technology and What Drivers Need to Know Now

As an FCA-authorised expert broker that has helped arrange over 750,000 policies, WeCovr has seen a clear trend emerge in the UK motor insurance market. The very technology designed to make our cars safer—Advanced Driver-Assistance Systems (ADAS)—is paradoxically pushing insurance premiums higher. This guide explains why and what you can do about it.

First, The Legal Essentials: Your UK Motor Insurance Obligations

Before we delve into the complexities of modern vehicle technology, it’s crucial to understand the legal bedrock of driving in the United Kingdom. It is a criminal offence to own or drive a vehicle on public roads without at least the minimum level of motor insurance. The penalties for being caught without it are severe, including unlimited fines, driving bans, and penalty points on your licence.

The Three Levels of Cover Explained

When you compare motor insurance quotes, you'll encounter three main types of cover. Understanding the differences is vital for choosing the right policy for your needs and budget.

• 1. Third-Party Only (TPO): This is the legal minimum requirement in the UK. It covers injury to other people (third parties) and damage to their property or vehicle in an accident where you are at fault. Crucially, it does not cover any damage to your own vehicle or your own injuries.
• 2. Third-Party, Fire and Theft (TPFT): This includes everything TPO cover offers, plus protection if your car is stolen or damaged by fire. It still does not cover damage to your vehicle from an accident that was your fault.
• 3. Comprehensive: This is the highest level of cover. It includes everything from TPFT, but also covers damage to your own car, regardless of who was at fault in an accident. It often includes other benefits as standard, such as windscreen cover and personal accident cover. Surprisingly, comprehensive cover can sometimes be cheaper than lower levels, as insurers may view drivers who select it as more responsible.

What About Business and Fleet Insurance?

If you use your vehicle for work purposes—beyond a standard commute—you need business car insurance. Standard policies will not cover you. For companies operating multiple vehicles, fleet insurance is a legal and commercial necessity. It consolidates policies for all company vehicles into one, simplifying administration and often reducing costs. Fleet managers have a legal "duty of care" to ensure their vehicles are safe and properly insured, a responsibility made more complex by ADAS technology.

Understanding Your Car Insurance Policy: Key Terms

To navigate the world of motor insurance UK, you need to speak the language. Here are some key terms that directly impact the price you pay and the cover you receive.

No-Claims Bonus (NCB)

Also known as a No-Claims Discount (NCD), this is a significant discount on your premium that you earn for each year you drive without making a claim. It can build up to a discount of 70% or more after five or more claim-free years. Making a claim, especially an "at-fault" one, will typically reduce or completely wipe out your NCB, leading to a sharp rise in your premium at renewal.

Your Policy Excess

The excess is the amount of money you must contribute towards a claim. It's made up of two parts:

• Compulsory Excess: A fixed amount set by the insurer. This is non-negotiable and often higher for young or inexperienced drivers, or for high-performance vehicles.
• Voluntary Excess: An amount you agree to pay in addition to the compulsory excess. Choosing a higher voluntary excess can lower your overall premium, but you must ensure you can afford to pay the total excess (compulsory + voluntary) if you need to make a claim.

Optional Extras

Insurers offer a range of add-ons to enhance a standard policy. Common extras include:

• Breakdown Cover: Assistance if your car breaks down at the roadside or at home.
• Motor Legal Protection: Covers legal costs if you need to pursue a claim for uninsured losses (like your excess or loss of earnings) after a non-fault accident.
• Guaranteed Courtesy Car: Provides a replacement vehicle while yours is being repaired. A standard policy might only provide a small basic car, and only if yours is repairable. This upgrade often guarantees a similar-sized vehicle, even if yours is written off.

What Exactly are Advanced Driver-Assistance Systems (ADAS)?

ADAS refers to a suite of intelligent safety features built into modern cars. Their goal is to automate, adapt, and enhance vehicle systems to reduce human error, which the Department for Transport attributes to around 85% of all road accidents.

These systems rely on a network of sensors—cameras, radar, lidar (Light Detection and Ranging), and ultrasonic—to "see" the world around the vehicle. This information is processed by the car's computer to warn the driver or take automatic action.

Here are some of the most common ADAS features found in UK cars today:

The Great ADAS Paradox: Safer Cars, Higher Premiums

Logically, technology that prevents accidents should lead to fewer insurance claims and, therefore, lower motor insurance costs. And to some extent, the first part of that equation is true.

The Promise: Fewer Accidents

Research from Thatcham, the motor industry's safety and security research body, has consistently shown the effectiveness of ADAS. For instance:

• Autonomous Emergency Braking (AEB) has been shown to reduce front-to-rear collisions by around 38%.
• Cars equipped with Blind Spot Monitoring have a 14% lower rate of lane-change accidents.

Insurers welcomed this technology, anticipating a significant drop in claims frequency. However, the financial reality has been very different.

The Reality: More Expensive Claims

While the number of small bumps and scrapes may be falling, the cost of repairing a vehicle after an incident has skyrocketed. According to the Association of British Insurers (ABI), the total cost of vehicle repairs paid out by insurers in the UK has surged. In 2023, repair costs rose by 32% year-on-year to a record £6.1 billion.

This "tech-flation" means that even a minor prang can now result in a bill running into thousands of pounds, wiping out any savings from a reduced accident rate. This is the central reason why your car insurance premium is likely rising, even with a clean driving record.

The Root of the Problem: Why ADAS Repairs Cost a Fortune

The soaring cost isn't down to one single factor, but a combination of complex, interconnected issues that have created a perfect storm for repair bills.

Costly Components in Vulnerable Places

The sensors that power ADAS are sophisticated and expensive pieces of hardware. Unfortunately, they are often located in the most vulnerable parts of a car:

• Windscreen: Modern windscreens are no longer just a piece of glass. They house cameras for lane assist, traffic sign recognition, and AEB. A tiny chip or crack can require the entire unit to be replaced.
• Bumpers and Grille: These areas are packed with radar and ultrasonic sensors for parking assist and adaptive cruise control. A low-speed car park knock can damage multiple sensors.
• Wing Mirrors: Often contain cameras for 360° view systems and sensors for blind spot monitoring. A simple sideswipe is no longer a cheap fix.

Replacing a single radar sensor can cost over £800, and a forward-facing camera can be over £600, before labour and calibration are even considered.

The £1,500 Windscreen: Calibration Explained

The most significant hidden cost is calibration. After a sensor is replaced or disturbed—for instance, during a windscreen replacement, suspension work, or even a wheel alignment—it must be precisely recalibrated to ensure it "sees" the world correctly.

If calibration is not performed, or is done incorrectly, the ADAS features can fail catastrophically. An AEB system might brake too late or not at all, while a lane-keep assist could steer the car into oncoming traffic.

There are two types of calibration:

1. Static Calibration: Performed in a workshop using a specialist rig and targets. This requires a large, level space and expensive equipment, costing hundreds of pounds.
2. Dynamic Calibration: Involves driving the vehicle on well-marked roads at specific speeds for a set distance to allow the system to recalibrate itself. This still requires a trained technician and can take a considerable amount of time.

This has transformed the cost of what used to be a simple repair.

Table: Windscreen Replacement Cost Comparison (Illustrative)

Note: Costs are illustrative and vary by model, location, and repairer.

The Specialist Skills Gap

Repairing and calibrating ADAS-equipped vehicles requires technicians with specialist training and access to manufacturer-specific diagnostic tools. The UK automotive industry is facing a significant skills gap in this area. This shortage of qualified technicians means that garages that can do the work can charge a premium, and labour rates for these specialist jobs are high. Insurers must direct customers to their approved network of garages that have made the necessary investment in tools and training, further concentrating the work and controlling costs.

The Rise of the "Economic Write-Off"

One of the most concerning trends is the increase in vehicles being written off after relatively minor accidents. A vehicle is declared a "total loss" or "write-off" when the cost of repair is deemed uneconomical compared to its market value.

With ADAS, a collision that causes only cosmetic damage to an older car could damage multiple sensors, headlights, and bumpers on a new one. The repair bill can easily reach £5,000-£10,000. If the car is only worth £15,000, the insurer will likely decide to write it off, pay you the market value (minus your excess), and sell the damaged vehicle for salvage. This increases the total claims cost for the insurer, which is then passed on to all customers through higher premiums.

Which Vehicles Are Most Exposed to "Tech-flation"?

While almost all new cars have some form of ADAS, the impact on insurance is not felt equally across the board.

New Cars vs. Older Models

Unsurprisingly, the newer the car, the more integrated ADAS it is likely to have. Since 2022, new car models launched in the EU and UK must have certain ADAS features, including Intelligent Speed Assistance and Emergency Lane Keeping, fitted as standard. This means almost every new car sold today comes with these complex systems, making them susceptible to high repair costs from day one.

The Electric Vehicle (EV) Premium

Electric vehicles are often at the forefront of technology, and this includes extensive ADAS suites. This creates a double-whammy for EV insurance:

1. High ADAS Repair Costs: As detailed above.
2. High Battery Repair/Replacement Costs: The traction battery is the most expensive component, and even minor damage can require specialist repairs or a full replacement costing tens of thousands of pounds.

This combination makes insuring an EV more expensive than an equivalent petrol or diesel car.

The Fleet Management Conundrum

For fleet managers, ADAS presents both an opportunity and a challenge.

• The Pro: ADAS helps fulfill the duty of care to drivers by reducing accident frequency, potentially lowering the human and administrative cost of incidents.
• The Con: When accidents do happen, vehicle downtime is longer due to complex repairs and parts delays. The cost of fleet insurance is also directly impacted by the high average cost per claim.

Expert advice is crucial for managing these competing pressures. A specialist broker like WeCovr can help fleet managers navigate the complexities of insuring a modern fleet, finding policies that balance comprehensive cover with cost-effectiveness and risk management support.

How to Fight Back: A Driver's Guide to Lowering ADAS-Related Insurance Costs

While the trend of rising premiums is industry-wide, there are proactive steps you can take to manage your motor policy costs.

Pre-Purchase Checks: Think Like an Insurer

• Research Insurance Groups: Every car in the UK is assigned an insurance group from 1 (cheapest) to 50 (most expensive). Before buying, check the group of your intended model.
• Investigate Repairability: Look at research from Thatcham. Their awards highlight cars that are not only safe but also designed to be cheaper to repair, which can have a positive impact on insurance.
• Ask the Right Questions: When at the dealership, ask about the ADAS features. Where are the sensors located? What is the typical cost of a windscreen replacement? A good salesperson should be able to provide this information.

Getting the Right Cover: Honesty is the Best Policy

• Declare All Features: When getting a quote, you must declare all factory-fitted driver aids. If you have an option pack that includes extra ADAS features, this must be disclosed. Failure to do so could lead to your insurer refusing a claim or even voiding your policy.
• Shop Around Intelligently: Don't just rely on a single comparison website. Use a variety of sources, including speaking to an independent broker. An expert broker like WeCovr has access to specialist insurers and schemes that aren't always available on mainstream sites. Our experts understand the nuances of insuring technologically advanced vehicles and can help find the best car insurance provider for your specific circumstances.
• Check the Policy Wording: Read the fine print. Does your policy guarantee the use of manufacturer-approved parts (OEM parts)? Does it explicitly cover ADAS calibration at an approved repairer? A cheaper policy might cut corners on this, leaving you with an unsafe vehicle.
• Review Your Excess: Setting a higher voluntary excess can be a good way to reduce your premium, but make sure the total excess is an amount you could comfortably afford to pay out of pocket.

Navigating a Claim: Demand a Proper Repair

• Use the Insurer's Approved Repairer: In most cases, your insurer will require you to use a garage from their approved network. These garages have been vetted to ensure they have the right tools and training to handle ADAS repairs.
• Request a Calibration Certificate: After any repair that could affect ADAS, ask the garage for a certificate or a printout from the diagnostic machine that proves the calibration has been completed successfully and according to manufacturer specifications. This is your proof that the car's safety systems are working correctly.

The Future Outlook: Will ADAS Insurance Costs Ever Come Down?

The current situation of high repair costs is likely to persist for the next few years. However, there are reasons for cautious optimism:

• Industry Pressure: Organisations like Thatcham and the ABI are actively lobbying car manufacturers to design vehicles that are easier and cheaper to repair without compromising safety.
• Maturing Technology: As ADAS becomes ubiquitous, the cost of sensor technology may fall. Repair processes will become more streamlined, and the number of qualified technicians will hopefully increase.
• Better Data: Insurers are gathering vast amounts of data on which ADAS features are most effective at reducing not just the frequency but also the severity and cost of claims. This will allow for more accurate and fairer pricing in the future.

The journey towards fully autonomous vehicles will continue to reshape the motor insurance landscape, gradually shifting liability from the driver to the vehicle manufacturer and software provider. But for now, the driver remains firmly in control, both of the wheel and of the key decisions that influence their insurance costs.

Ready to see how your modern car affects your premium?

The world of motor insurance is getting more complex, but you don't have to navigate it alone. The experts at WeCovr can help you compare quotes from a wide range of UK insurers, including specialists who understand the challenges of insuring cars with advanced technology. We also offer discounts on other insurance products when you buy motor or life cover through us.

Get a free, no-obligation motor insurance quote from WeCovr today and ensure you have the right cover at the right price.