electric vehicle

Policybazaar's report on EVs

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— 2 min read
Policybazaar's report on EVs

As India accelerates towards an electric vehicle (EV) revolution, insurance adoption for EVs—both cars and two-wheelers—has witnessed a significant upswing. Analyzing recent data trends, we observe a steady increase in policy purchases and a shift in consumer preferences.

A rapid climb in EV car insurance adoption from 0.50% to 14%

The share of insurance policies sold for EV cars has grown exponentially over the past three years:

  • FY23: 0.50%
  • FY24: 3.50%
  • FY25: 8.2% (with March 2025 peaking at 14%)

This trajectory indicates not just rising EV adoption but also greater awareness of the importance of insurance protection among consumers.

Bookings for two-wheeler EVs become 2X in a year’s time

Among insured two-wheelers under five years of age, 7-8% of bookings in the last quarter were for EVs. This share is doubling year over year, climbing from 10,000 policies last year to 20,000 this year.

Interestingly, the market is heavily skewed towards scooters, accounting for 98-99% of insured EV two-wheelers, reflecting current market trends.

Urban hotspots like Delhi-NCR and Bangalore driving adoption

Insurance adoption remains concentrated in metro cities, with the top five contributing 55% of all EV insurance bookings:

  • Delhi-NCR: 18.3%
  • Bangalore: 16.0%
  • Pune: 7.6%
  • Chennai: 6.7%
  • Mumbai-Thane: 6.4%

Tier 1 cities dominate with 58% of policies, followed by Tier 2 at 30% and Tier 3 at 12%, reinforcing the urban-driven nature of EV adoption.

Add-ons like Zero-Dep, RSA and Battery Protector in high demand

EV owners prioritize comprehensive protection, evident from the popularity of insurance add-ons:

  • For EV Cars: Zero Depreciation, Roadside Assistance, Battery Cover, Key & Lock Replacement, Consumables, Invoice Price Protection, and Tyre Protection.
  • For EV Two-Wheelers: Battery Protector (for theft/damage) and Charger Cover are exclusive to EVs, while standard add-ons like Zero Depreciation, Roadside Assistance, and Return to Invoice are also preferred.

Battery thefts and fire incidents: The most common reasons for claims

EVs, particularly two-wheelers, have higher claim rates compared to internal combustion engine (ICE) vehicles. The primary reasons include:

  • Battery Theft: Batteries constitute 50-60% of an EV’s cost, making them a prime target for theft.
  • Fire Incidents: Overheating during charging has led to fire accidents and total loss claims.
  • Higher Severity of Claims: Due to the high cost of EV components, especially batteries, repair and replacement claims tend to be expensive.
Amit Chhabra, CBO of General Insurance at Policybazaar said "The accelerating adoption of EV insurance signals India's shift toward sustainable mobility. With EV insurance share growing nearly 16-fold in just three years, consumers are not only adopting electric vehicles but also recognizing the need for tailored protection. As the market evolves, insurers are constantly innovating to address unique risks, ensuring EV adoption is backed by robust protection of insurance."

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