The two-wheeler insurance market is witnessing a significant rural boom, with 49% of purchases now originating from tier-3 cities. High-end bike coverage is on the rise, while the Zero-Depreciation add-on has emerged as the most popular choice, accounting for 78% of policies, Policybazaar said in the latest assessment.
It is mandatory to purchase at least a third-party two-wheeler insurance policy in India, as required by the Motor Vehicles Act.
While third-party insurance is the minimum legal requirement, many vehicle owners opt for comprehensive insurance, which also covers damages to their vehicle and provides broader protection.
Key analysis done by Policybazaar as listed below;
Adoption of Comprehensive Two-Wheeler Insurance In India
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- Comprehensive insurance remains the most popular option among two-wheeler owners, with 57% opting for it, followed by 43% choosing third-party (TP) coverage.
- The preference indicates that consumers are now looking for coverage that includes thefts, accidents and damages caused due to floods and other natural disasters, beyond third-party protection.
YOY growth in Comprehensive Plan adoption
- The adoption of comprehensive two-wheeler insurance has witnessed a year-on-year (YOY) growth of 8% to 10%.
- The increase reflects rising awareness about the benefits of comprehensive insurance. Factors such as increased road traffic and accidents, and frequent incidents of rain damage may be driving this trend.
Popular Add-ons Chosen by Consumers
- When it comes to additional coverage, Zero Depreciation is the most sought-after add-on, chosen by 78% of consumers. This indicates a growing interest in minimizing out-of-pocket expenses related to wear-and-tear claims.
- Meanwhile, 19% choose compulsory personal accident (CPA) coverage, and 18% select roadside assistance, showcasing the rising importance of convenience and personal safety among two-wheeler owners.
- For EVs, the trend shows that battery cover/shield add-ons are gaining momentum in the market.
Buying Trends By Vehicle Type
- There is a clear preference for motorbikes, with 70% of insurance purchases made for bikes, compared to 30% for scooters. This aligns with the overall market, where bikes are more common, especially in rural and semi-urban areas.
- The most common bike segment is 150-220 CC which are primarily used for day-to-day commutes.
- Scooters, while accounting for a smaller share, are often preferred by women, students, and city commuters.
High-end Bike Insurance
- A niche but growing segment, 7.4% of two-wheeler insurance purchases are for high-end bikes.
- Given the high replacement costs and expensive repairs associated with these vehicles, owners are increasingly opting for comprehensive coverage to safeguard their investments.
Geographic Distribution of Purchases
- The data reveals that 49% of two-wheeler insurance purchases are made by customers in tier-3 cities, with tier-2 cities accounting for 27%, and Tier-1 cities comprising 24%.
- The high share from tier-3 cities highlights the widespread use of two-wheelers as the primary mode of transport in smaller towns and rural areas.
