Compact cars and SUVs drive three-fourth of motor insurance claims, EVs costliest to repair: Report
New Delhi, December 4
Compact cars and SUVs together account for nearly three-fourths of all motor insurance claims in the country, highlighting their dominance on Indian roads and in insurance payouts, an analysis report by PolicyBazaar has said.
The report showed that compact car owners generated the highest share of claim volumes at 44 per cent, largely due to city driving conditions and moderate-value repairs, which cost an average of Rs 21,084 per claim.
It stated "compact cars segment dominates claim volumes with 44 per cent share."
The report also shared that the SUVs emerged as the second-largest contributor with a 32 per cent share, but with a higher repair cost magnitude of Rs 29,032 and a comparatively high frequency of 16 per cent.
The report noted that SUV-related repairs are costlier due to bigger vehicle structures and higher component pricing.
Interestingly, electric vehicles (EVs) contributed only 1 per cent of total claim volumes but recorded the highest claim frequency at 29 per cent and severe repair costs averaging Rs 39,021 per claim.
According to the report, the high cost of repairing EVs is driven by expensive batteries and electronics.
Among major cities, Lucknow registered the highest claim frequency at 17 per cent, indicating high accident-prone routes and repeated collisions inside the city.
The NCR region stood out for high-cost repairs. Noida recorded one of the highest claim severities at Rs 25,157, followed by Gurgaon and Ghaziabad with severities above Rs 22,000.
The report highlighted that Pune sees higher repair bills despite similar claim volumes, while cities like Chennai (1.80 per cent) and Mumbai (1.50 per cent) maintain low incident rates and low repair cost burdens.
On the category of claims, the report said own-damage claims dominated motor insurance payouts at 95 per cent, mostly due to minor accidents, accidental bumps, and bumper-to-bumper repairs.
However, rare claim categories such as vehicle theft, bodily injury, and death trigger massive payouts.
The study further noted that petrol vehicles account for 68 per cent of claim volumes, while EVs remain the costliest to repair. Newer vehicles up to three years old generated the highest claim severity at Rs 28,310, reflecting the rising cost of OEM parts.
It also said that 86 per cent of vehicle owners raise claims only when necessary to protect their No Claim Bonus (NCB).
Region-wise, the report highlighted that the North leads the country in motor insurance claims, while the South follows with 31 per cent of the total share.
— ANI
Reader Comments
As an SUV owner in Gurgaon, I can confirm. A small scratch on the bumper costs a fortune. Insurance premiums are already high, and now they'll probably go up again after this report.
Lucknow at 17% claim frequency! That's telling. The traffic discipline there is non-existent. Glad to see Chennai and Mumbai doing better. Southern cities generally have better driving sense, I feel.
Interesting data. The 86% stat about people avoiding claims to protect NCB is very relatable. We just paid for a small repair out of pocket last month for that exact reason. The system almost discourages you from using the insurance you pay for.
This is a useful report, but I wish it also suggested solutions. How do we bring down these costs? Better driver training? Stricter traffic policing in high-claim areas like Lucknow and NCR? The focus shouldn't just be on data but on fixing the problem.
EVs being the costliest is a concern. Government is pushing for EV adoption with subsidies, but if repair costs and insurance become prohibitive, the total cost of ownership won't come down. Battery replacement cost is the elephant in the room.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.