Forecast Period
|
2027-2031
|
Market Size (2025)
|
USD 5.66 Billion
|
CAGR (2026-2031)
|
6.39%
|
Fastest Growing Segment
|
Insurance Companies
|
Largest Market
|
North
|
Market Size (2031)
|
USD 8.18 Billion
|
Market Overview
India Two
Wheeler Insurance Market was valued at USD 5.66 Billion in 2025 and is expected
to reach USD 8.18 Billion by 2031 with a CAGR of 6.39% during the forecast
period. Indian two-wheeler insurance market is primarily driven by various
factors, such as increased usage of two-wheelers like bikes and scooters by
more and more people as their primary mode of transportation. This has resulted
in an increased demand for two-wheeler insurance. Moreover, the Indian
government has made it mandatory for all two-wheelers on the road to have
insurance coverage. This has led to a significant increase in the number of
policies sold.
Additionally, there is a growing
awareness among two-wheeler owners about the importance of having insurance
coverage. People are becoming more aware of the risks associated with riding a
two-wheeler and are therefore more inclined to buy insurance policies. The
two-wheeler insurance market in India is highly competitive, with many insurers
offering a range of products at competitive prices. This has led to a rise in
the number of policies sold in Indian market. In addition, the number of
accidents involving two-wheelers has been increasing in India. This has led to
a greater awareness among two-wheeler owners about the importance of having
insurance coverage to protect themselves against financial liabilities.
In 2024, 49% of two-wheeler insurance policies were
purchased by customers in tier-3 cities, highlighting the rising reliance on
two-wheelers in these regions. Improved traffic enforcement and growing
awareness have led to a 60% renewal rate for comprehensive policies, while
third-party policy renewals rose by 20% year-on-year, reflecting increased
value recognition and regulatory impact.
Key Market Drivers
Rising Two-Wheeler Sales and Ownership
India is the world’s largest market for two-wheelers,
with millions of units sold annually. The growing middle class, increasing
disposable income, and urbanization have significantly boosted demand for
affordable and convenient transportation, making two-wheelers a preferred
choice. As more people buy two-wheelers, the demand for insurance naturally
rises. Insurance is mandatory under the Motor Vehicles Act, which requires all
vehicle owners to have at least third-party liability insurance. Additionally,
two-wheeler owners are increasingly opting for comprehensive insurance policies
that provide better protection against theft, accidents, and natural
calamities. The surge in vehicle registrations directly translates to more
insurance policies, fueling market growth. As per SIAM, India’s domestic
two-wheeler sales in October 2024 reached 21,64,276 units, marking a 14.2% YoY
growth from October 2023. Segment-wise, motorcycle sales led with 13,90,696
units, followed by scooters at 7,21,200 and mopeds at 52,380. Production also
rose, with scooters up 14.8%, motorcycles 12.9%, and mopeds 9.1%. Two-wheeler exports
surged by 25.4%, totaling 3,65,242 units, including 43,365 scooters and 3,20,459
motorcycles.
Increased Awareness and Digital Adoption
Awareness about the benefits of two-wheeler insurance
has grown significantly in recent years. Government campaigns, insurance
companies, and third-party aggregators have actively promoted the importance of
insuring vehicles to safeguard against financial losses due to accidents or
theft. The proliferation of smartphones and internet penetration has led to a
digital revolution in insurance distribution. Consumers now prefer online
platforms for ease, quick policy purchase, and comparison of different insurance
products. Digital tools also provide instant claim settlement and renewal
services, improving customer experience. According to Ministry of
Communication, as
of March 2024, India recorded 954.4 million internet subscribers—a nearly 3.8×
increase from 251.6 million in March 2014, reflecting a CAGR of 14.3%. Rural
subscribers stood at 398.4 million, with 95.2% of villages (over 612,952 out of
644,131) equipped with 3G/4G connectivity.
Regulatory Push and Stringent Compliance
The Indian government has played a pivotal role in
driving the two-wheeler insurance market through regulatory measures. The Motor
Vehicles Act mandates third-party insurance, ensuring that all two-wheelers on
the road have at least basic coverage. In recent years, stricter enforcement of
insurance compliance has led to increased insurance penetration. Penalties and
fines for driving without insurance have deterred uninsured riding. Moreover,
the government’s push for digital insurance policies and the introduction of
FASTag-like systems for quick verification of insurance status on roads
contribute to enhanced compliance. This regulatory framework ensures a larger
insured base and supports market expansion by encouraging timely renewals and
coverage upgrades.

Download Free Sample Report
Key Market Challenges
Low Insurance Penetration in Rural Areas
Despite rapid growth in urban centers, insurance
penetration among two-wheeler owners in rural and semi-urban India remains
relatively low. A significant portion of two-wheelers sold in these regions are
uninsured or underinsured. This is due to limited awareness about the
importance of insurance, lack of accessibility to insurance providers, and
lower financial literacy. Many rural customers perceive insurance as an
unnecessary or costly expense, especially when the immediate need for claims
seems unlikely. Additionally, infrastructure gaps such as poor internet
connectivity and fewer insurance agents reduce ease of purchase and renewal.
This low penetration slows down overall market growth and exposes many vehicle
owners to financial risk without adequate protection. Insurers face the
challenge of educating rural populations and creating distribution channels
tailored to rural needs, such as mobile-based platforms, local agents, and
vernacular communication to boost adoption.
Fraud and Claim Settlement Issues
Fraudulent claims and delayed claim settlements pose a
significant challenge to the two-wheeler insurance market. Insurance companies
frequently encounter cases of inflated or fake claims, which increase the
overall cost of insurance premiums for all customers. Additionally, the claims
process can sometimes be cumbersome and slow, especially in smaller towns or
rural areas where proper documentation and inspection may be delayed. These
inefficiencies hurt customer trust and satisfaction, discouraging renewals or
comprehensive coverage purchase. Moreover, policyholders often lack clarity on
claim procedures, leading to frustration and underutilization of insurance
benefits. Insurers need to invest in robust fraud detection technologies,
streamline claims processes, and improve customer service to build trust and
maintain profitability. Overcoming these issues is crucial for sustaining
market growth and consumer confidence.
Price Sensitivity and Competition
Price sensitivity is a major challenge in the Indian
two-wheeler insurance market, where customers often prioritize the lowest
premium over comprehensive coverage. Many buyers opt for the mandatory
third-party insurance to meet legal requirements but avoid comprehensive
policies due to higher costs. This behavior limits revenue growth for insurers
and can leave customers exposed to risks. Furthermore, intense competition
among numerous insurance providers leads to aggressive pricing strategies,
sometimes resulting in unsustainable premium rates. The entry of digital
aggregators has increased price transparency but also intensified price-based
competition, pushing insurers to reduce margins. To address this challenge,
insurers must focus on product differentiation, value-added services, and
customer education on the benefits of comprehensive coverage. Balancing
affordability with profitability is key to sustaining long-term growth in this
highly competitive market.
Key Market Trends
Digital Transformation and Online
Distribution
One of the most significant trends in the India
two-wheeler insurance market is the rapid digital transformation of insurance
distribution and servicing. Increasing internet penetration and smartphone
adoption have made it easier for consumers to purchase, renew, and claim
insurance policies online. Insurers are leveraging digital platforms, mobile
apps, and online aggregators to offer quick quotes, easy policy comparison, and
instant purchase options. This digital shift reduces dependency on traditional
agents, lowers operational costs for insurers, and enhances customer
convenience. Moreover, online claim submission and real-time tracking have
improved transparency and faster claim settlements. The adoption of digital KYC
(Know Your Customer) and e-payment systems also simplifies the buying process.
Insurers are investing in AI and data analytics to personalize offerings,
detect fraud, and optimize pricing. This trend is making insurance more
accessible, especially to tech-savvy young buyers, and is expected to drive
market growth by expanding the customer base.
Growth of Comprehensive and Add-on Covers
While third-party insurance remains mandatory, there
is a growing trend of consumers opting for comprehensive two-wheeler insurance
policies that provide broader protection against theft, accidental damage,
natural disasters, and third-party liabilities. Insurers are innovating with
add-on covers such as zero depreciation, roadside assistance, engine and
gearbox protection, and personal accident cover for riders. These value-added
features cater to increasing consumer awareness and demand for better risk mitigation.
The rising disposable income and preference for hassle-free claim settlements
encourage buyers to upgrade their coverage. This trend not only increases the
average premium per policy but also enhances customer loyalty and satisfaction.
Customized insurance packages based on vehicle type, usage, and rider profile
are gaining popularity, reflecting a more mature market.
Integration of Telematics and Usage-Based Insurance
Telematics and usage-based insurance (UBI) are
emerging trends in the two-wheeler insurance market, driven by advancements in
IoT (Internet of Things) and connected vehicle technologies. Insurers are
beginning to offer policies where premiums are calculated based on actual
vehicle usage, riding behavior, and mileage, monitored through GPS and mobile
apps. This pay-as-you-drive model benefits safe riders with lower premiums and
encourages responsible riding habits. Telematics also helps in faster claim assessment
and theft recovery through real-time tracking. While still in nascent stages in
India, UBI is gaining traction due to rising awareness about personalized
insurance and demand for cost-effective solutions, especially among young urban
riders. As the technology becomes more affordable and regulatory frameworks
evolve, telematics-driven insurance products are expected to grow
substantially, transforming risk assessment and customer engagement in the
two-wheeler insurance market.
Segmental Insights
Vehicle Type Insights
In the India Two Wheeler Insurance Market, motorcycles
dominated the vehicle type segment due to their widespread popularity and
extensive use across both urban and rural areas. Motorcycles account for the
largest share of two-wheelers on Indian roads, primarily because of their
versatility, fuel efficiency, and affordability. They cater to a broad range of
consumers, from daily commuters and delivery riders to long-distance travelers
and commercial users. This extensive usage naturally leads to a higher demand
for insurance coverage. Motorcycle owners are more likely to purchase
insurance, including comprehensive policies, to protect themselves against
risks such as accidents, theft, and natural disasters. The relatively higher
purchase price of motorcycles compared to scooters or mopeds also encourages
owners to invest in better insurance coverage. Additionally, motorcycles are
preferred in regions with rough terrain and longer travel distances, further
increasing the likelihood of insurance uptake to mitigate potential financial
losses. Furthermore, the government’s enforcement of mandatory third-party
insurance under the Motor Vehicles Act ensures that most motorcycles are at
least minimally insured, contributing to the segment’s dominance in the
insurance market. With the increasing awareness about the benefits of insurance
and the growing penetration of digital sales platforms, the motorcycle
insurance segment is expected to continue its strong growth trajectory in
India.

Download Free Sample Report
Regional Insights
The North region of India stands out as the dominant
region in the India Two Wheeler Insurance Market due to several key factors.
This region includes populous states like Uttar Pradesh, Punjab, Haryana, and
Delhi, which together have a large concentration of two-wheeler users. The
dense population and significant urbanization in this area contribute to high
demand for personal mobility solutions, making two-wheelers one of the most
preferred modes of transport. The North region’s economic growth and rising
disposable incomes have increased two-wheeler ownership, driving higher
insurance uptake. Additionally, strict enforcement of motor vehicle
regulations, including mandatory third-party insurance, has boosted insurance
penetration in the region. The increasing awareness about the financial
protection offered by insurance policies further encourages vehicle owners to
opt for comprehensive coverage. Moreover, the presence of well-established
insurance companies and digital distribution channels in the North region
facilitates easy access to insurance products, enabling convenient policy
purchases and renewals. The robust infrastructure, combined with widespread
digital literacy and smartphone penetration, supports the growing trend of
online insurance transactions. Overall, the North region’s demographic
advantages, economic development, regulatory enforcement, and strong insurance
distribution networks position it as the leading market for two-wheeler
insurance in India, contributing significantly to the sector’s overall growth
and expansion.
Recent Developments
- In 2025, PhonePe has launched a new digital vehicle insurance
plan for both two-wheelers and four-wheelers. This offering enables users to
compare policies from multiple insurers and purchase them directly through the
PhonePe app. Designed as a cost-effective alternative to traditional dealership
insurance, the plan allows users to save up to ₹4,000 on two-wheeler insurance
and up to ₹40,000 on four-wheeler insurance. The entire process is 100%
digital, eliminating paperwork, dealer commissions, and hidden charges,
offering users a seamless and transparent insurance-buying experience.
- In 2025, PolicyBazaar
is reinventing bike insurance through digitization: it offers instant online
comparison and purchase, self‐inspection
video tools to revive lapsed policies within hours, and AI‑powered voice
support to streamline renewals. These innovations have doubled annual renewal
revenues, cut complaint rates by over 80%, and accelerated turnaround time from
days to hours—transforming the user experience.
- Liberty
General Insurance has launched a new two-wheeler insurance product targeting
₹12 crore in premiums this fiscal. The policy offers comprehensive coverage,
including vehicle damage, theft, personal accident for riders and pillions, and
third-party liability. It’s distributed online via intermediaries, reducing
paperwork and expanding reach. Backed by fast digital processing and extensive
network capabilities, it's designed as an entry point to upsell additional
retail insurance offerings.
- In 2023, Kotak
General Insurance has introduced a specialized bike insurance plan aimed at
enhancing road safety for two-wheeler owners. The plan
offers comprehensive coverage including vehicle repair, theft protection,
personal accident benefits, and third-party liability. Its fully digital
distribution channels reduce paperwork and improve accessibility, expanding
reach and convenience for users across India.
Key Market Players
- Bajaj Allianz General
Insurance Company Limited
- Tata AIG General Insurance Company Limited
- HDFC ERGO General Insurance Company Limited
- Future Generali India Insurance Company Limited
- The Oriental Insurance Company Ltd.
- Reliance General Insurance Co. Ltd.
- United India Insurance Company LTD.
- Cholamandalam MS General Insurance Co. Ltd.
- GO DIGIT General Insurance Ltd.
- Kotak Mahindra Insurance Co. Ltd.
By Vehicle Type
|
By Type
|
By Source
|
By Application
|
By Region
|
- Scooters/Mopeds
- Motorcycle
- Electric Two-Wheeler
|
- Third Party Insurance Policy
- Comprehensive Insurance Policy
- Standalone Own Damage Policy
|
- Insurance Companies
- Insurance Agents/Brokers
- Banks
- Others
|
- Personal Insurance
- Commercial Insurance
|
|
Report Scope:
In this report, the India Two Wheeler Insurance
Market has been segmented into the following categories, in addition to the
industry trends which have also been detailed below:
- India Two Wheeler Insurance
Market, By Vehicle Type:
o Scooters/Mopeds
o Motorcycle
o Electric Two-Wheeler
- India Two Wheeler Insurance
Market, By Type:
o Third Party Insurance Policy
o Comprehensive Insurance Policy
o Standalone Own Damage Policy
- India Two Wheeler Insurance
Market, By Source:
o Insurance Companies
o Insurance Agents/Brokers
o Banks
o Others
- India Two Wheeler Insurance
Market, By Application:
o Personal Insurance
o Commercial Insurance
- India Two Wheeler Insurance
Market, By Region:
o North
o South
o East
o West
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents
in the India Two Wheeler Insurance Market.
Available Customizations:
India Two Wheeler Insurance Market report with the
given market data, TechSci Research offers customizations according to a
company's specific needs. The following customization options are available for
the report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
India Two Wheeler
Insurance Market is an upcoming report to be released soon. If you wish an
early delivery of this report or want to confirm the date of release, please
contact us at [email protected]