India’s electric vehicle (EV) insurance market has seen a staggering 16x surge in demand over the last three years, with the share of EV insurance policies increasing from 0.50% in FY23 to 14% in March 2025. This rapid growth is indicative of a broader shift toward sustainable mobility, as Indian consumers increasingly recognize the need for specialized insurance tailored to the unique characteristics of EVs.

Rising Demand and Adoption Trends

The surge in EV insurance demand is primarily driven by a growing shift toward electric vehicles, as India continues to embrace greener, more sustainable transportation options. The number of insured two-wheeler EVs has doubled over the last year, with policies for electric scooters accounting for 7-8% of all two-wheeler insurance policies under five years. This marks a significant jump from just 10,000 policies last year to 20,000 this year. The electric scooter has emerged as the dominant vehicle in this category, accounting for 98-99% of the insured two-wheeler EVs.

Geographic Distribution of EV Insurance

Adoption of EV insurance is heavily concentrated in the top five metropolitan cities of Delhi-NCR, Bangalore, Pune, Chennai, and Mumbai-Thane, which together account for 55% of all EV insurance policies. Among these cities, Delhi-NCR leads with the largest market share of 18.3%, followed by:

• Bangalore: 16% market share

• Pune: 7.6%

• Chennai: 6.7%

• Mumbai-Thane: 6.4%

Interestingly, Tier-I cities account for 58% of all EV insurance policies, while Tier-II cities and Tier-III cities make up 30% and 12%, respectively. This reflects a growing acceptance of EVs and associated insurance products beyond just the largest urban centers.

Consumer Preferences: Tailored Insurance Solutions

A notable trend in the EV insurance market is the increasing demand for comprehensive insurance packages that offer enhanced protection. Consumers are opting for add-on coverages to ensure their EVs are fully protected against the unique risks associated with electric vehicles. Key add-ons include:

• Zero Depreciation: Providing full coverage without accounting for depreciation.

• Roadside Assistance: For emergency services in case of breakdowns.

• Battery Cover: Protecting the high-value battery against damage or theft.

• Tyre Protection: Covering damage to tyres due to road hazards.

For two-wheeler EVs, there are specialized add-ons like:

• Battery Protector: Covering theft or damage to the battery.

• Charger Cover: Ensuring protection for charging equipment.

This growing preference for tailored EV insurance solutions reflects a heightened awareness among EV owners about the need to safeguard their vehicles and components that are often not included in traditional vehicle insurance policies.

Delhi-NCR: The Leading Market for EV Insurance

Delhi-NCR remains the largest market for EV insurance in India, contributing 18.3% of the total policies purchased. This is closely followed by Bangalore, which holds a 16% share, highlighting the increasing EV adoption in tech-driven cities. Pune and Chennai, with market shares of 7.6% and 6.7%, respectively, also show strong demand for EV insurance.

As the shift to electric mobility accelerates across the nation, EV insurance is becoming an essential aspect of vehicle ownership. In line with this, the demand for insurance policies and related add-ons continues to grow, making the EV insurance market one of the most dynamic sectors in India’s rapidly evolving automotive industry.

The Role of EV Insurance in India’s Green Transition

The rise in EV adoption and the corresponding demand for insurance are important indicators of India’s green transition. As more consumers make the switch to electric mobility, the need for specialized insurance solutions tailored to the unique features and requirements of electric vehicles will continue to rise. This not only supports the sustainable development of the nation’s transport sector but also presents a growing opportunity for insurers to cater to the evolving needs of a greener, tech-savvy market.

The rapid adoption of electric vehicles and the corresponding rise in insurance demand also underscores the growing importance of the insurance sector in ensuring the sustainability of India’s transportation system. EVs, often seen as a more environmentally friendly alternative to traditional vehicles, are also becoming increasingly reliable and secure, thanks to specialized insurance solutions designed to protect the interests of EV owners.

Looking Ahead: The Future of EV Insurance in India

The future of EV insurance in India looks incredibly promising, with the market expected to continue its rapid expansion as more consumers opt for electric mobility solutions. As adoption grows, the sector will likely witness innovations in policy offerings, including further customization of coverage options and additional features tailored to the evolving needs of EV owners. Furthermore, insurers will likely expand their services to cater to emerging segments within the electric vehicle market, such as electric buses and heavy-duty electric trucks.

In conclusion, the surge in demand for EV insurance marks a significant shift in India’s automotive landscape and highlights the critical role of tailored insurance in fostering the growth of sustainable transportation. With increasing consumer awareness and a growing range of coverage options, EV insurance will continue to play an essential role in India’s transition to a greener, more sustainable future.

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