Rural Surge In Two-wheeler Insurance , 49% Purchases From Tier-3 Cities

The latest data on two-wheeler insurance reveals a significant rise in demand from rural and semi-urban areas, with 49 per cent of purchases made by customers from Tier-3 cities. This trend highlights the growing importance of two-wheelers as a primary mode of transport in smaller towns and rural regions.

The report, which outlines consumer behaviour trends for 2024, indicates that comprehensive two-wheeler insurance remains the most popular option, with 57 per cent of owners opting for it, compared to 43 per cent choosing third-party coverage. This preference highlights a shift towards policies that provide coverage for theft, accidents, and damages from natural disasters, beyond just third-party protection.

There has been a year-on-year (YOY) growth of 8 to 10 per cent in the adoption of comprehensive insurance, driven by factors such as increased road traffic, accidents, and frequent incidents of rain-related damages. The data suggests that two-wheeler owners are becoming more aware of the benefits of comprehensive coverage.

Among the add-ons, Zero Depreciation coverage is the most popular, chosen by 78 per cent of consumers, reflecting a desire to minimise out-of-pocket expenses for wear-and-tear claims. Other add-ons like compulsory personal accident (CPA) coverage and roadside assistance are selected by 19 per cent and 18 per cent of consumers, respectively, emphasising the growing importance of convenience and personal safety. For electric vehicles (EVs), battery cover/shield add-ons are gaining traction.

In terms of vehicle types, motorbikes dominate the market, accounting for 70 per cent of insurance purchases, compared to 30 per cent for scooters. The most common bike segment is the 150 to 220 CC range, mainly used for daily commuting. While scooters hold a smaller share, they remain popular among women, students, and city commuters.

High-end bikes represent a niche but growing segment, with 7.4 per cent of two-wheeler insurance purchases attributed to them. Given the high replacement costs and expensive repairs associated with these vehicles, owners are increasingly opting for comprehensive coverage to protect their investments.

Geographically, Tier-2 cities account for 27 per cent of two-wheeler insurance purchases, while Tier-1 cities make up 24 per cent, highlighting the diverse and expanding market for two-wheeler insurance across India.