The latest two-wheeler consumer behaviour report from Policybazaar highlights a growing trend in insurance purchases, particularly from rural and semi-urban areas. According to the data, 49 per cent of two-wheeler insurance policies in 2024 have been purchased by customers from tier-3 cities, demonstrating the increasing importance of two-wheelers as a primary mode of transport in these regions.
According to the report, 57 per cent of two-wheeler owners have taken to comprehensive insurance coverage while 43 per cent have gone in for third-party insurance coverage. This shift towards more extensive coverage reflects a growing awareness of mote protection offered by comprehensives which include theft, accidents and natural calamity, in addition to third-party risks.
Manas Kapoor, Head, Two-Wheeler Insurance, Policybazaar, points out that the trend is driven by both rising awareness and the need for compliance. "With an increased share of comprehensive policies and traffic enforcement, people are recognising the value of insurance coverage. The renewal rate for comprehensive policies is 60 per cent, compared to 48 per cent for third-party policies," he said. He also noted that the overall renewal rate for third-party insurance has increased by 20 per cent year-on-year, indicating the growing impact of traffic enforcement measures.
Renewal Versus New Purchases
Kapoor explained that while only about 8 per cent of the two-wheeler insurance market consists of new purchases, the majority is made up of renewals from the past 10 to 15 years. Renewals have seen a rise, with 72 per cent of customers renewing their policies before the expiry date, suggesting that two-wheeler owners are becoming more proactive in maintaining their insurance coverage.
The report also highlights that rural consumers are just as likely to renew their policies as urban consumers, with renewal rates standing at 51 per cent in rural areas compared to 53 per cent in urban areas. However, rural consumers show a stronger preference for comprehensive coverage, with 70 per cent opting for it, compared to 50 per cent in urban areas, where two-wheelers are often used as secondary vehicles.
Add-Ons And Popular Features
Zero Depreciation coverage remains the most popular add-on, chosen by 78 per cent of consumers, as it minimises out-of-pocket expenses for wear-and-tear claims. Among new bike owners, 74 per cent choose this add-on, further indicating a growing awareness of its benefits. Other add-ons, such as compulsory personal accident (CPA) coverage and roadside assistance, are selected by 19 per cent and 18 per cent of consumers, respectively. Electric vehicle owners are also beginning to opt for battery shield add-ons as they become more prevalent.
Rural Consumers And Awareness Gaps
While rural consumers show an understanding of core insurance benefits such as the No Claim Bonus (NCB), Kapoor noted that awareness still needs to be improved. "About 65 per cent of our website traffic consists of people without an active policy, which leads to lapses in their NCB. This is an area where more education is needed, both in rural and urban areas," he added.
Preferences Based On Vehicle Type
In terms of vehicle types, motorbikes dominate, accounting for 70 per cent of insurance purchases, compared to 30 per cent for scooters. The most popular bike segment is in the 150 to 220 CC range, primarily used for daily commuting. While scooters hold a smaller market share, they remain popular among women, students, and city commuters. High-end bikes, though niche, represent a growing segment, with 7.4 per cent of two-wheeler insurance purchases coming from this category. Owners of high-end bikes are increasingly opting for comprehensive coverage to protect their investments.
Policybazaar's latest data reveals a clear shift in consumer behaviour, with more two-wheeler owners opting for comprehensive coverage and becoming proactive about renewing their policies. The report also shows that while rural consumers are embracing insurance at a similar rate to their urban counterparts, there is still room for improvement in raising awareness about key benefits like No Claim Benefits (NCB). As two-wheelers continue to play an important role in daily transport, particularly in rural and semi-urban areas, the demand for insurance is expected to rise, emphasising the need for effective insurance products.
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