For decades, motor insurance in India was largely seen as a ‘grudging purchase’ – a mandatory hurdle to clear before hitting the road. But data from this year – shared with FE by Policybazaar.com – reveals a fundamental transformation. Driven by the surge in electric vehicles (EVs), and a newfound appetite for data-driven savings, Indian drivers are moving from compliance to protection.
2.5x growth in EV insurance
Paras Pasricha, head, Motor Insurance, Policybazaar.com, told FE that new EV motor insurance purchases grew nearly 2.5x year-on-year. “Even more striking is the 200% surge in premiums for these vehicles. This far outpaces the modest sub-10% purchase growth seen in traditional petrol and diesel segments,” he said. “The premium spike reflects not just higher adoption, but also the higher ticket size of EVs, which require specialised coverage for battery systems and tech-heavy components.”
Beyond basic insurance
Pasricha added that this year Indian car owners started treating insurance as an active risk-management tool. “The data shows that, for a new car owner, a basic policy is no longer enough,” he said. “Nearly every new car buyer (96%) now opts for zero depreciation, ensuring that wear-and-tear doesn’t eat into their claims.”
Pay-As-You-Drive
Pasricha said that a major shift this year has been the popularity of the Pay-As-You-Drive (PAYD) model. “This usage-linked model has moved from an experiment to a financial strategy for car owners,” he said. “Almost 20% of customers now opt for PAYD policies. These drivers, typically clocking 7,500-8,500 km annually, are achieving 25-30% savings compared to standard comprehensive plans. It is a trend suited for the hybrid-work era, where the family car might sit idle for half the week.”
He added that car owners are moving beyond conventional, compliance-led buying to making smarter, personalised choices.
Lastly, he shared data on top insured models of the year:
Two-wheelers: Honda Activa, TVS Jupiter, Hero Splendor Plus, and Royal Enfield Classic.
Four-wheelers: Maruti Wagon R, Maruti Baleno, Maruti Swift, Tata Nexon, Hyundai i20, Mahindra XUV 3XO, Mahindra XUV700, Hyundai Creta, and Tata Punch.