In the last three years, online car insurance has witnessed high growth across cities due to increasing digital adoption and changing customer preferences. Tier 1 cities, including major metros, maintained a steady growth of 35 percent, reflecting the continued dependence on digital platforms for insurance needs. Meanwhile, Tier-2 cities experienced a significant increase of 70 per cent, driven by increased internet penetration, better access to digital tools and increased awareness about the cost-effectiveness of online insurance.

The most notable growth was in Tier 3 cities and rural areas, which saw a staggering 110 percent increase. This growth reflects focused efforts by insurers to penetrate underserved regions and increasing reliance on online platforms among these segments, data from PolicyBazaar, an insurance web aggregator, reveals.

Online motor insurance is particularly popular among younger demographics, with the majority of buyers being between the ages of 25-40. This is in line with the digital habits of millennials and Gen Z, who prefer the convenience of online transactions.

Electric vehicles (EVs) have emerged as a prominent high-growth segment. Online EV insurance policies grew by 423 percent in 2022 and 399 percent in 2023, making electric vehicles the fastest-growing category in car insurance. This growth is attributed to the availability of specific policies for EV owners, reflecting a broader shift towards environmentally responsible and digitally enabled solutions.

Delhi leads the online motor insurance space with a share of 8.1 per cent, showcasing its dominance as a digitally active market. Bangalore follows with a share of 4.4 per cent and Mumbai has a share of 2.1 per cent; This underlines the strong presence of tech-savvy customers in urban areas. Emerging hubs like Pune and Lucknow, each with 1.9 per cent share, show increased adoption in Tier 2 cities.

Certain car models dominate the online insurance market, reflecting their popularity among digitally active consumers. Maruti Wagon R and Maruti Swift top the list with a share of 5.9 percent, followed by Hyundai i20 with a share of 4.4 percent and Maruti Baleno with a share of 4.3 percent, appealing to those looking for a mix of affordable prices and premium features. Maruti Alto, with a 4.2 per cent share, continues to highlight the importance of mass market vehicles in the online insurance space.