The online motor insurance landscape in India has seen growth over the last three years, with tier-2 and tier-3 cities leading the charge. According to data from Policybazaar, the increasing digital penetration, better internet access, and growing awareness about the affordability of online insurance have spurred adoption in these regions, while electric vehicles (EVs) are driving a pivotal shift toward sustainable, digital-first solutions.
Tier-wise growth in online motor insurance adoption
Over the past three years, the growth of online motor insurance has been robust across various tiers:
Tier-1 cities: The steady adoption in metro cities has seen a 35% growth.
Tier-2 cities: A significant surge of 70% reflects the increasing reach of digital platforms in these areas.
Tier-3 cities and rural areas: The most exceptional growth was witnessed here, with a 110% increase.
Top cities for online motor insurance purchases
The cities leading online motor insurance sales paint a picture of growing digital adoption across India:
Delhi remains at the forefront, with an 8.1% market share.
Bangalore (4.4%) and Mumbai (2.1%) follow closely.
Emerging tier-2 cities like Pune and Lucknow (1.9% each) are also contributing significantly to the upward trend in online insurance adoption.
Popular car models dominating online insurance
Certain car models are standing out in the online insurance space, largely driven by their popularity among digital customers.
Maruti Wagon R and Maruti Swift are the top models, each commanding a 5.9% share.
Other top models include the Hyundai i20 (4.4%) and Maruti Baleno (4.3%). The Maruti Alto (4.2%) further underscores the relevance of mass market vehicles in the online insurance ecosystem.
EVs leading the charge in online policies
A standout trend in the motor insurance sector is the explosive growth of EVs. Online insurance policies for EVs grew by 423% in 2022 and 399% in 2023, marking the EV segment as the fastest-growing category in motor insurance.
Age-wise trends in online buyers
Online motor insurance is especially popular among younger demographics, with a significant majority of buyers aged 25-40 years — primarily comprising tech-savvy millennials and Gen Z consumers.
However, older age groups (40+) are also becoming increasingly comfortable with purchasing insurance online, highlighting a growing trust in digital financial platforms.
Paras Pasricha, Head of Motor Insurance at Policybazaar, emphasised, “The surge in online motor insurance adoption, especially in tier-2 and tier-3 cities, underscores a significant shift in how insurance is being perceived and purchased across India. Increasing digital penetration, better internet access, and growing consumer awareness are driving this transformation. As digital-first insurance platforms continue to enhance accessibility and affordability, we expect this trend to gain further momentum, making online motor insurance a mainstream choice across urban and rural India alike.”