Cars have become considerably safer, yet insurance premiums have not fallen in proportion. The reason is that safety technology reduced how often claims occur while sharply increasing what each one costs.
How a premium is constructed
An insurer estimates the probability that a policy produces a claim and the expected cost if it does, then multiplies the two.
Reducing frequency lowers the first term. Raising severity raises the second, and the two can offset each other entirely.
Where severity rises faster than frequency falls, the expected cost per policy increases even as roads become safer.
Why sensors made bumpers expensive
Driver assistance systems require sensors positioned where they can see the road, which means bumpers, windscreens, wings and mirror housings.
Those are precisely the components damaged in low-speed impacts, so the cheapest collisions now involve the most expensive parts.
Replacement is only part of it, because a sensor must be recalibrated to a defined alignment afterwards, requiring equipment and workshop time.
What changed in bodywork
High-strength steels and aluminium structures behave differently under repair, and many sections cannot be heated or straightened without losing their properties.
Manufacturers therefore specify replacement of complete sections and often require particular joining methods, which restricts who can carry out the work.
Approved repair networks with the necessary equipment and training charge accordingly, and the number of shops able to do the work is limited.
Why electric vehicles amplified it
A battery pack occupies the floor of the vehicle, which is close to the areas damaged in side and underbody impacts.
Assessing whether a pack has been compromised is difficult, and where it cannot be verified as sound the safe course is replacement, which can approach the value of the car.
Storage of a potentially damaged vehicle also requires precautions, which adds cost before any repair decision has even been made.
What this does to pricing
Vehicles are grouped for insurance according to expected repair cost, and technology-dense models are placed in higher groups regardless of how safely they are driven.
Parts availability now feeds in as well, since a car awaiting a component accrues replacement vehicle costs for every day it is off the road.
The result is that a driver with an unblemished record can still see premiums rise, because the change is in the cost of the car rather than in their own behaviour.