India’s festive-season car-buying activity has generated a significant boost for the motor insurance industry. New-car insurance policy purchases increased 21.5% in October 2026 compared with September, as customers buying vehicles around Navratri and Diwali also arranged insurance coverage. The increase highlights how seasonal automobile demand can create additional business opportunities for insurers and digital insurance distribution platforms.
The data, released by Policybazaar and reported by Moneycontrol, is based on an analysis of 48,000 new-car insurance policy purchases. October purchases were also 8.4% higher than in the same month last year. Alongside higher policy volumes, the findings reveal changing customer preferences: electric vehicles are gaining a larger share, and buyers are increasingly selecting additional protection such as zero-depreciation, roadside assistance and battery cover.
New-Car Insurance Purchases Rise 21.5% in October
Policybazaar recorded a 21.5% month-on-month increase in new-car insurance purchases during October 2026. The year-on-year increase of 8.4% suggests that the growth was not limited to a seasonal comparison with September.
Festive occasions traditionally encourage vehicle purchases because customers often coordinate major spending decisions with discounts, new model launches, financing offers and family celebrations.
Every new vehicle also requires the appropriate insurance coverage before it can legally be driven on public roads. As a result, an increase in vehicle deliveries generally translates into additional demand for new motor insurance policies.
However, the figures should be interpreted carefully. They measure new-car insurance purchases through Policybazaar, not the entire motor insurance market. They also do not represent renewals of existing policies or establish that insurance demand across all vehicle categories increased by the same percentage.
Key findings from Policybazaar’s October analysis
| Indicator | October 2026 data |
|---|---|
| New-car insurance purchases | Up 21.5% month-on-month |
| Year-on-year growth | 8.4% |
| Policies analysed | 48,000 |
| Electric vehicle share | 23.1% |
| Petrol vehicle share | 51.35% |
| Diesel vehicle share | 17.7% |
| Zero-depreciation cover adoption | 96.6% |
| Roadside assistance adoption | 90.2% |
| EV battery cover adoption | Approximately 85% |
The figures indicate that festive vehicle purchases are supporting insurance distribution, while the composition of insured vehicles and the types of protection customers choose are also changing.
Electric Vehicles Account for 23.1% of New-Car Insurance Policies
One of the most significant findings is the growing share of electric vehicles in new-car insurance purchases.
Electric vehicles accounted for 23.1% of the policies analysed in October 2026, compared with 13.3% in October 2025 and 7.6% in October 2024.
<text weight=”medium” color=”default”>EV share of new-car insurance purchases</text>
| Period | EV share |
|---|---|
| October 2024 | 7.6% |
| October 2025 | 13.3% |
| October 2026 | 23.1% |
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The EV share has more than tripled in two years, indicating that electric cars are becoming a more important part of the new-vehicle insurance business.
Petrol vehicles continued to dominate, accounting for 51.35% of purchases, while diesel vehicles represented 17.7%. Other fuel categories accounted for the remaining 7.82%.
The growing EV contribution has implications for insurers because electric vehicles have different components and repair requirements from conventional cars.
Battery packs are among the most expensive components of electric vehicles. Damage, electrical faults and replacement costs can create different insurance considerations. This makes the availability and terms of battery-related protection particularly important for EV owners.
Buyers Prefer More Comprehensive Insurance Protection
The Policybazaar analysis also highlights strong demand for optional motor insurance add-ons.
Zero-depreciation cover recorded the highest adoption rate at 96.6%, followed by roadside assistance at 90.2% and return-to-invoice cover at 80.1%.
Other popular options included consumables cover, key and lock replacement and engine protection.
Motor insurance add-on adoption
| Add-on cover | Adoption rate |
|---|---|
| Zero-depreciation | 96.6% |
| Roadside assistance | 90.2% |
| Return-to-invoice | 80.1% |
| Consumables cover | 75.8% |
| Key and lock replacement | 70.1% |
| Engine protection | 62.1% |
| EV battery cover among EV policies | Approximately 85% |
These figures suggest that customers are increasingly considering protection beyond the basic insurance requirement when purchasing a new vehicle.
Zero-depreciation cover is particularly popular because it limits depreciation deductions on eligible vehicle parts during claim settlement, subject to policy conditions. Roadside assistance can help customers deal with breakdowns, towing and certain emergency situations.
Return-to-invoice cover can provide additional compensation in specified total-loss or theft situations, while consumables cover may pay for eligible items such as oils, nuts and bolts that are otherwise excluded from standard claim settlements.
However, higher adoption does not mean every add-on is necessary for every vehicle owner. Customers should compare exclusions, claim limits, deductibles and additional premiums before selecting coverage.
EV Owners Are Prioritising Battery Protection
Battery cover adoption among electric vehicle insurance policies stood at approximately 85%, according to Policybazaar.
This is significant because the battery is one of the most valuable components of an electric car. Repair or replacement costs can be substantial, making the terms of battery protection an important consideration for buyers.
Insurance requirements can vary depending on the vehicle, manufacturer warranty and policy structure. Buyers should check whether the insurance policy covers accidental battery damage, electrical issues, water-related damage and other specified risks.
They should also examine exclusions and conditions that may affect claims.
The growing adoption of battery cover suggests that customers are becoming more conscious of the financial risks associated with owning electric vehicles.
Bengaluru Leads New-Car Insurance Purchases
The increase in new-car insurance demand is not restricted to India’s largest metropolitan markets.
Policybazaar’s analysis showed that the top 10 cities accounted for 41.72% of new-car insurance purchases in October.
Bengaluru led with a 9.93% share, followed by Delhi at 8.33% and Pune at 5.69%.
Gurugram, Mumbai, Chennai and Noida also featured among the leading markets. Patna and Jaipur appeared in the top 10, indicating that demand is also coming from smaller urban centres.
| City | Share of purchases |
|---|---|
| Bengaluru | 9.93% |
| Delhi | 8.33% |
| Pune | 5.69% |
| Gurugram | 3.47% |
| Mumbai | 3.15% |
| Chennai | 2.76% |
| Noida | 2.64% |
| Patna | 2.01% |
| Jaipur | 1.84% |
The geographic distribution suggests that digital insurance platforms are capturing demand across different types of urban markets. However, the top 10 cities’ combined share also shows that a substantial portion of purchases comes from locations outside these leading markets.
What the Trend Means for India’s Motor Insurance Industry
The October figures highlight the close relationship between automobile sales and motor insurance distribution.
When customers purchase new vehicles, insurers and intermediaries gain opportunities to sell mandatory third-party coverage, own-damage protection and optional add-ons.
The changing fuel mix also creates opportunities for insurers to develop products suited to electric vehicles. Battery protection, electrical component coverage and specialised repair arrangements could become increasingly important as EV ownership expands.
Digital platforms such as Policybazaar can benefit from this shift because customers can compare policies, premiums and add-ons while completing the vehicle purchase process.
Nevertheless, the October data represents one distribution platform’s policy purchases and should not be treated as an industry-wide market-share report or proof of higher profitability for insurers.
The Bigger Picture
India’s motor insurance market is evolving alongside changes in the automobile industry. The growing share of electric vehicles is creating demand for specialised protection, while high adoption of add-ons indicates that many new-car buyers are considering the financial consequences of accidents, repairs and vehicle theft more carefully. For insurers, this creates opportunities to develop more relevant products and strengthen digital distribution.
The festive season remains an important sales period, but the longer-term opportunity will depend on sustained vehicle demand, EV adoption, competitive insurance pricing and customer confidence in claim settlement. The October increase offers evidence of stronger new-car policy activity, although it does not establish whether the same growth rate will continue throughout the year.
Looking Ahead
Insurance companies and digital distributors will watch November and the following months to determine whether October’s increase translates into sustained demand. The performance of new-car sales, particularly electric vehicles, will influence policy volumes and the demand for specialised add-ons. Insurers will also need to balance broader coverage with affordable premiums, transparent exclusions and efficient claims processing.
For customers, the changing market makes it increasingly important to compare more than just the headline insurance premium. Insured declared value, deductibles, cashless garage networks, battery protection and add-on conditions can significantly influence the value of a policy. As India’s vehicle market becomes more diverse, the motor insurance industry will need to adapt its products to the different risks associated with petrol, diesel and electric cars.
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