How ADAS Affects Your Car Insurance Premium in India

Advanced Driver Assistance Systems (ADAS) have become a common feature in many Indian cars, such as Tata Harrier, Hyundai Creta, and Mahindra XUV7X0. These technologies are enhancing safety on the road by preventing mishaps. But does ADAS affect car insurance premiums? The answer is not straightforward. While these features in cars help prevent accidents, they can also impact your repair costs, both of which are important factors in determining car insurance premiums.Read more

What is ADAS?

ADAS is a set of smart safety features built into modern cars. These systems use cameras, sensors, radar, and software to watch the road around you and even provide alerts or automatic responses when needed. They can warn you, help you steer, or even brake on their own to avoid a crash. Some of the common ADAS features in Indian cars include:

• Automatic Emergency Braking (AEB): The car brakes by itself if a collision is about to happen
• Lane Departure Warning: Alerts you if you drift out of your lane
• Adaptive Cruise Control: Maintains a safe distance from the car ahead
• Blind Spot Detection: Warns you of vehicles in your blind spot
• Forward Collision Warning: Alerts you before a possible front-end crash

*Note: ADAS features only assist; they do not drive the car for you.

Why Car Insurers Pay Attention to ADAS

Car insurance companies calculate premiums based on the level of risk associated with a driver and the car. Since ADAS features are designed to reduce the chances of accidents, insurers closely monitor their impact on road safety. They view vehicles equipped with advanced safety features as less likely to be involved in collisions. Thus, it influences their underwriting decisions and premium calculations.

How ADAS Makes Your Car Insurance Premium Higher

Owning an ADAS car increases the own damage (OD) premium of your car insurance policy. Here is how.

1. Higher IDV

   ADAS variants cost more to buy. They are often priced ₹1-3 lakh higher than the non-ADAS version of the same car. Your OD premium is based on your car's Insured Declared Value (IDV). A higher IDV means a higher premium. Simple.

2. Expensive ADAS Repairs

   ADAS sensors and cameras are fitted in exposed spots. The front bumper, the rear bumper, and the windshield are the areas that get hit first in any accident. A small bumper scrape that used to cost ₹5,000 to fix can now cost ₹50,000 or more. Replacing and recalibrating a radar sensor is not cheap. So even a minor claim becomes a bigger claim when your car has ADAS.

How ADAS Can Make Your Car Insurance Premium Lower

Since ADAS helps prevent accidents, it means fewer claims. Hence, it lowers your car insurance premium. Have a look:

1. Fewer Accidents, Fewer Claims

   This is the major benefit. Automatic Emergency Braking alone has been shown to reduce rear-end crashes by up to 50%. That means less chance of you filing a claim at all. Insurance companies treat ADAS as a risk-reducing feature. A car that crashes less is a car that costs less to insure.

2. No Claim Bonus (NCB) Grows Faster

   If your ADAS system helps you avoid even one accident, your No Claim Bonus in car insurance stays intact. This NCB can save you up to 50% on your OD premium at renewal (for not claiming for 5 consecutive years).

Do Indian Motor Insurance Companies Give an ADAS Discount?

As of now, no Indian insurer offers an ADAS-based discount on your car insurance premium. The policy pricing model used by most insurers relies on the car's IDV, engine capacity, age, and area of your vehicle registration. However, as more ADAS cars hit Indian roads and claims data builds up, insurers may be able to price ADAS risk more accurately.

Which Car Insurance Add-Ons Do ADAS Car Owners Need?

Since ADAS components are expensive to repair, a standard car insurance cover may not be enough. So, consider these add-ons when buying a policy if your car has ADAS features:

1. Zero Depreciation Cover

   The zero dep cover is a must-have if you have a car with ADAS. These components include a lot of plastic and electronic components. Without this cover, your insurer will deduct depreciation before paying the claim. However, with the zero dep add-on, you get the full repair cost covered, except the applicable deductibles.

2. Return to Invoice Cover

   In case your car is stolen or declared a total loss, the return to invoice add-on, also known as the invoice protect cover, pays you the original on-road price of your car. For high-IDV ADAS cars, the gap between IDV and on-road price can be significant.

3. Roadside Assistance Cover

   Sensor or electrical faults can stop your car suddenly. The roadside assistance add-on includes coverage for towing and basic emergency services, such as puncture repair, battery jump-start, etc.

4. Engine Protection Cover

   ADAS cannot protect your engine from water ingress or hydrostatic lock. The engine protection add-on in car insurance fills that gap.

Conclusion

ADAS is a genuine safety upgrade. It makes you a safer driver. Over time, that safety may help lower your car insurance premiums. Right now, the relationship between ADAS and insurance in India is mixed. However, as these technologies become standard in more affordable cars and repair costs drop, car insurance premiums are likely to be lower too.