A recent analysis by online insurance aggregator PolicyBazaar has shed light on the current landscape of motor insurance claims in India. The report, which scrutinises claim patterns, reveals that two vehicle segments dominate the roads and, consequently, the insurance payouts.
Dominance of Compact Cars and SUVs in Claim Volumes
The data presents a clear picture: compact cars and Sports Utility Vehicles (SUVs) together are responsible for nearly three-fourths of all motor insurance claims across the country. This overwhelming share underscores their massive popularity among Indian consumers and their significant impact on the insurance industry's outflow.
Leading the pack are compact cars, which alone generate 44 per cent of total claim volumes. The report attributes this high frequency to typical city driving conditions, where minor accidents are more common, and the moderate average repair cost of ₹21,084 per claim makes filing claims more feasible for owners.
SUVs follow as the second-largest contributor, accounting for 32 per cent of claim volumes. However, the financial impact of SUV claims is heavier. The average repair cost for an SUV is significantly higher at ₹29,032, driven by their larger vehicle structures and more expensive components. This segment also shows a comparatively high claim frequency of 16 per cent.
Electric Vehicles: Low Volume but Highest Repair Cost
In a striking finding, the report highlights the unique claim profile of electric vehicles (EVs). While EVs currently contribute only 1 per cent of the total claim volumes, they present the most severe cost challenge. EVs recorded the highest claim frequency at 29 per cent among the segments analysed, and the average repair cost per claim soared to ₹39,021, making them the costliest vehicles to fix.
The analysis points to the high expense of EV batteries and sophisticated electronics as the primary drivers behind these steep repair bills. This data is crucial for insurers and owners as the EV market continues to expand in India.
City-Wise Trends and Claim Categories
The PolicyBazaar report also breaks down the data geographically and by claim type. On a city level, Lucknow registered the highest claim frequency at 17 per cent, suggesting accident-prone routes and repeated collisions within the city.
The National Capital Region (NCR) stood out for high-cost repairs. Noida recorded one of the highest claim severities at ₹25,157, with Gurgaon and Ghaziabad also showing average repair costs above ₹22,000. In contrast, cities like Chennai (1.80% claim frequency) and Mumbai (1.50%) maintained low incident rates and lower repair cost burdens.
In terms of claim categories, own-damage claims overwhelmingly dominate motor insurance payouts at 95 per cent. These are mostly triggered by minor accidents, bumps, and bumper repairs. However, the report notes that rarer categories like vehicle theft, bodily injury, and death, though infrequent, result in massive individual payouts.
Additional Insights from the Report
The study offered several other key insights into India's motor insurance ecosystem:
- Petrol vehicles account for 68 per cent of claim volumes, reflecting their market share.
- Newer vehicles, aged up to three years, generated the highest claim severity at ₹28,310, indicating the rising cost of original equipment manufacturer (OEM) parts.
- A significant 86 per cent of vehicle owners raise claims only when absolutely necessary to protect their valuable No Claim Bonus (NCB) discount.
- Region-wise, North India leads the country in motor insurance claims, with the South region following with a 31 per cent share of the total.
This comprehensive analysis, based on data published on December 4, 2025, provides vital metrics for insurers to refine risk models and for consumers to make more informed decisions about their vehicle purchases and insurance coverage.
