Electric Vehicle Insurance Witnesses Upsurge in Demand
Electric vehicle insurance witnesses an upsurge in demand, with adoption rates increasing an astonishing 16 times within just three years, based on internal data from Policybazaar.
The data indicates that the private sector insurers’ proportion of insurance policies for electric vehicles, which was only 0.50 percent in FY23, rose to 14 percent in March 2025, now standing at 8.2 percent.
In particular, insured two-wheeler electric vehicles showed 7-8 percent of all two-wheeler insurance policies issued in the last five years.
The report revealed that this percentage has more than doubled over the preceding year, with policies rising from 10,000 in the previous year to 20,000 this year.
Electric scooters are said to make up most of this market segment, comprising 98-99 percent of insured two-wheelers.
The surge in EVs is believed to be in the top five metropolitan cities namely Delhi-NCR, Bangalore, Pune, Chennai, and Mumbai-Thane, which collectively represent 55 percent of all EV insurance policies sold.
Delhi-NCR alone captured an impressive 18.3 percent of the market share, while Bangalore followed with 16 percent, Pune with 7.6 percent, Chennai with 6.7 percent, and Mumbai-Thane with 6.4 percent.
The data indicates that tier 1 cities are the primary players in the EV insurance market, accounting for 58 percent of all policies. Meanwhile, tier 2 and 3 cities make up 30 percent and 12 percent, respectively.
The data also implies that EV buyers are not only acquiring basic coverage but are increasingly choosing comprehensive insurance options that provide additional protection.
Common add-ons for electric vehicles include Zero Depreciation, Roadside Assistance, Battery Cover, Key & Lock Replacement, Consumables, Invoice Price Protection, and Tyre Protection.
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For electric two-wheelers, add-ons such as Battery Protector and Charger Cover are specifically tailored for EVs, in addition to the more widely available options like Zero Depreciation and Roadside Assistance.