Two-wheeler insurance market sees major shift towards Tier-3 cities

As reliance on two-wheelers grows in rural areas, comprehensive insurance options gain traction among consumers.

By  Storyboard18Oct 3, 2024 9:33 AM
Two-wheeler insurance market sees major shift towards Tier-3 cities
The report highlights that comprehensive two-wheeler insurance is the preferred choice for 57% of buyers, overshadowing the 43% who opt for third-party coverage. (Image source: Unsplash)

In a notable shift in the two-wheeler insurance market, a recent report from Policybazaar reveals that nearly half of all insurance purchases now originate from tier-3 cities. This trend underscores the increasing dependence on two-wheelers as the primary mode of transport in rural and semi-urban regions. While tier-2 cities contribute 27% and tier-1 cities account for 24% of purchases, the dominance of tier-3 cities is a clear indication of changing consumer behaviour.

The report highlights that comprehensive two-wheeler insurance is the preferred choice for 57% of buyers, overshadowing the 43% who opt for third-party coverage. This growing preference reflects a heightened demand for protection against accidents, theft, and natural disasters, with year-on-year growth in comprehensive insurance adoption reaching 8-10%.

Increased awareness of the benefits of comprehensive coverage is driving this trend, suggesting a shift in consumer priorities towards more robust protection.

Among the various add-on options, the zero depreciation cover stands out as the most popular choice, selected by 78% of consumers. Additionally, 19% opt for compulsory personal accident (CPA) coverage, while 18% choose roadside assistance. Notably, interest in battery cover add-ons for electric vehicles (EVs) is also on the rise, indicating an evolving market landscape.

When it comes to vehicle types, motorbikes dominate the insurance purchases, accounting for 70% of total sales. The 150-220 CC segment emerges as the most common, while high-end bikes are becoming an increasingly popular niche, representing 7.4% of sales as owners seek comprehensive coverage to safeguard their investments.

Manas Kapoor, Head of Two-Wheeler Insurance at Policybazaar, commented on these findings, saying, "We're seeing a shift in how people, especially in smaller towns, approach two-wheeler insurance. With nearly half of all purchases coming from tier-3 cities, it's clear that two-wheelers are essential for daily commuting. What's interesting is the growing preference for comprehensive coverage-people are no longer just settling for third-party insurance. They're looking for more protection, whether it's against accident theft, or even natural disasters like floods. The popularity of the zero depreciation add-on shows how much consumers value reducing their repair costs and protecting their investments."

First Published on Oct 3, 2024 9:33 AM

More from Storyboard18

Brand Marketing

India's sports industry hits Rs 16,633 crore in 2024, driven by sponsorship, endorsements: GroupM

India's sports industry hits Rs 16,633 crore in 2024, driven by sponsorship, endorsements: GroupM

Brand Makers

Movie theatres are never coming back, says Netflix's co-CEO Ted Sarandos

Movie theatres are never coming back, says Netflix's co-CEO Ted Sarandos

Brand Makers

Ranveer Allahbadia returns with a new podcast after India's Got Latent row, netizens pour support

Ranveer Allahbadia returns with a new podcast after India's Got Latent row, netizens pour support

Brand Marketing

Renault to take full control of Indian manufacturing JV, acquires Nissan’s 51% stake

Renault to take full control of Indian manufacturing JV, acquires Nissan’s 51% stake

Brand Marketing

Google to pay $100 million to settle 14-year-old ad lawsuit

Google to pay $100 million to settle 14-year-old ad lawsuit

Brand Makers

Diageo's Hina Nagarajan stresses on diversity even as global corporates downplay

Diageo's Hina Nagarajan stresses on diversity even as global corporates downplay

Brand Makers

PepsiCo's CEO says 'consumer maverick' mindset drives success amid Cola Wars

PepsiCo's CEO says 'consumer maverick' mindset drives success amid Cola Wars

Brand Marketing

IAS expands operations in India to address demand for digital measurement and optimisation

IAS expands operations in India to address demand for digital measurement and optimisation