PB Fintech 's Policybazaar has released a comprehensive report highlighting transformative trends that shaped India's motor insurance market in 2025, with electric vehicle adoption and mainstream add-on acceptance emerging as key drivers of change.

Electric Vehicle Insurance Shows Explosive Growth

The electric vehicle segment demonstrated exceptional momentum in the insurance market, significantly outperforming traditional vehicle categories. The following table illustrates the stark contrast in growth patterns:

This substantial difference reflects both accelerated EV adoption across India and higher insurance cover values associated with electric vehicles, according to the Policybazaar report.

Add-on Coverage Transitions from Optional to Essential

The report reveals a fundamental shift in consumer behavior, with insurance add-ons becoming mainstream choices rather than optional extras. The adoption rates demonstrate widespread acceptance of comprehensive coverage:

Brand-New Vehicle Owners Prioritize Comprehensive Protection

For brand-new vehicles, buyers demonstrated even stronger preference for comprehensive coverage, with significantly higher adoption rates across all add-on categories:

These statistics indicate that new vehicle owners are increasingly prioritizing maximum protection for their investments, with Zero Depreciation coverage becoming nearly universal at 96% adoption.

Market Transformation Reflects Evolving Consumer Preferences

The data reveals a motor insurance market undergoing significant transformation, driven by technological advancement in the automotive sector and changing consumer expectations. The explosive growth in EV insurance purchases, combined with mainstream adoption of comprehensive add-on coverage, suggests Indian consumers are becoming more sophisticated in their insurance choices and willing to invest in comprehensive protection for their vehicles.

India's health insurance sector is experiencing a remarkable transformation as consumers increasingly opt for comprehensive coverage following the removal of GST on health insurance premiums. The policy change has catalyzed a significant shift in buying behavior, with Indians moving away from minimal coverage toward more robust protection.

Coverage Levels Surge Post-GST Relief

Data from PB Fintech 's Policybazaar platform reveals the substantial impact of GST removal on health insurance adoption. The average health insurance coverage has increased dramatically, demonstrating consumers' willingness to invest in better protection when cost barriers are reduced.

Shift Away from Low-Value Policies

The most significant change has been the decisive move away from inadequate coverage levels. Policies with sums insured below ₹10.00 lakh have experienced substantial decline, reflecting consumers' growing awareness of medical inflation and rising healthcare costs.

Multi-Year Policies Gain Momentum

Consumers are increasingly committing to longer-term coverage, seeking to avoid future premium increases and reduce renewal complexities. This trend indicates a more strategic approach to health insurance planning.

• Four-year policy tenures: +56% growth
• Five-year policy tenures: +62% growth

Unlimited Coverage Plans See Rapid Adoption

Perhaps the most striking development is the surge in unlimited health insurance plans. These comprehensive policies, which eliminate traditional sum-insured caps, have transformed from niche products to mainstream options.

Geographic Expansion Beyond Metros

The health insurance adoption trend extends beyond major urban centers, with smaller cities driving significant growth. Tier-3 cities now represent a substantial portion of health insurance purchases, indicating widespread awareness and acceptance.

This geographic expansion suggests that health insurance awareness and adoption are becoming more democratized across India's diverse urban landscape. The combination of GST relief and increased health consciousness has created favorable conditions for comprehensive insurance coverage to flourish beyond traditional metropolitan markets.