Recently, Shutterdrives got an opportunity to speak to Amit Bhadoria, National Sales Head, Motor BU at PolicyBazaar Partners. Read on as Amit tells us about new trends in the Motor vehicle insurance industry, important tips, Pay-as-you-drive model and more.
According to you, what are the top 5 add-ons that benefit a vehicle owner the most?
One of the most essential add-ons for vehicle owners is the Zero Depreciation Cover. This add-on ensures that the policyholder receives the full cost of replacing or repairing damaged car parts without factoring in depreciation. For vehicle owners, this means lower out-of-pocket expenses and better financial protection in case of an accident. Another critical add-on is the Engine Protection Cover, which is highly valuable in situations like waterlogging or severe accidents where the car’s engine might get damaged or seized. Repairing or replacing an engine, especially in high-end vehicles, can be very expensive. This cover provides much-needed financial relief, making it indispensable for those living in areas prone to heavy rains or floods.
Roadside Assistance (RSA) is another add-on that is most preferred.This add-on ensures immediate help in case of a vehicle breakdown or flat tire issues etc. It’s particularly beneficial during long journeys or in remote locations where access to repair services can be challenging.
Are there any new trends that you are seeing, with first-time buyers?
First-time buyers are showing a strong preference for flexible and cost-effective insurance options, with PAYD (Pay-As-You-Drive) plans gaining popularity. PAYD (Pay-As-You-Drive) car insurance allows policyholders to save on their own damage premium based on the total number of kilometers driven in a year. This type of comprehensive car insurance helps reduce the premium cost depending on the vehicle’s usage. It is especially beneficial and convenient for drivers who do not drive regularly, as they only pay for the insurance coverage they need based on their actual driving distance. This plan offers significant savings for those who use their cars infrequently, making it an attractive option for first-time buyers looking for affordable and flexible insurance solutions.
Alongside this, there is an increasing awareness of insurance add-ons such as zero depreciation and roadside assistance. These add-ons are seen as essential for providing long-term financial protection and peace of mind, especially for first-time buyers who are learning to navigate the complexities of insurance.
Additionally, there is a noticeable shift towards electric vehicles (EVs) among first-time buyers. The growing focus on sustainability, combined with the affordability and long-term savings that EVs offer, is making them an attractive option. As more consumers opt for eco-friendly and cost-effective vehicles, the insurance market is adapting to meet the unique needs of EV owners, further driving the adoption of this new trend.
Do regional characteristics influence the purchasing habits of your customers and do they vary greatly?
Yes, regional characteristics do influence the purchasing habits of customers, and these habits vary significantly across different tiers and locations-
Tier-wise Growth in Online Motor Insurance Adoption:
- Tier-1 Cities: Online motor insurance adoption in Tier-1 cities has grown steadily by 35% over the past three years, with metro cities consistently relying on digital platforms.
- Tier-2 Cities: These cities have seen a significant 70% growth, driven by increasing digital penetration, better internet access, and growing awareness about the affordability of online insurance.
- Tier-3 Cities and Rural Areas: The growth in these areas has been exceptional, with a remarkable 110% increase in online motor insurance adoption. This reflects insurers’ efforts to reach underserved areas and the growing trust in online platforms among these segments.
Top Cities Buying Motor Insurance Online:
- Metros lead the way, with Delhi holding an 8.1% share, followed by Bangalore (4.4%) and Mumbai (2.1%). These cities showcase a strong presence of digitally-savvy customers.
- Emerging hubs like Pune and Lucknow (1.9% each) are also contributing significantly, showing the growing adoption of online motor insurance in Tier-2 cities.
PAYD (Pay-As-You-Drive) Adoption:
- Interestingly, the adoption of PAYD in comprehensive bookings remains consistent at 34-35% across Tier-1, Tier-2, and Tier-3 cities, indicating that this insurance model is widely accepted.
- Additionally, 65% of PAYD bookings in Tier-2 and Tier-3 cities come from states like Uttar Pradesh, Jharkhand, Telangana, and others, reflecting a nationwide embrace of this innovative insurance model.