IIRC it works by refraction, sending out a beam that, to an extent, bounces on the (outer) glass/air boundary back to a sensor. When there is water on the glass, the beam doesn't bounce, it just bends a bit, travels through the water and out through the water/air boundary (or at least somewhere else than the sensor...It bends and/or bounces due to the different refractive indices of the glass, air and water.

Edit: Supportive pdf, doesn't go any deeper though.