India Two Wheeler Insurance Market By Vehicle Type (Scooters/Mopeds, Motorcycle, Electric Two-Wheeler), By Type (Third Party Insurance Policy, Comprehensive Insurance Policy, Standalone Own Damage Policy), By Source (Insurance Companies, Insurance Agents/Brokers, Banks, Others), By Application (Personal Insurance, Commercial Insurance), By Region, Competition Forecast & Opportunities, 2021-2031F

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. 

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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. 

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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.

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).

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