Shocking Indian Auto Claims Revealed: Compact Cars & SUVs Dominate, EVs Costliest to Repair!

A comprehensive analysis by PolicyBazaar has shed light on the landscape of motor insurance claims across India, revealing a strong dominance by compact cars and sport utility vehicles (SUVs). Together, these segments represent nearly three-fourths of all motor insurance claims filed nationwide.

Compact Cars Lead Claim Volumes

Compact car owners generated the largest share of claim volumes, making up 44% of all claims. This trend is largely attributed to the prevalent city driving conditions and the nature of repairs, which are often moderate in value. The average repair cost for a compact car claim stands at Rs 21,084.

SUVs Emerge with Higher Repair Costs

SUVs were identified as the second-largest contributor to claim volumes, accounting for 32% of the total. However, these vehicles come with a significantly higher average repair cost, estimated at Rs 29,032. This magnitude of cost is attributed to the larger vehicle structures and the higher pricing of their components.

Electric Vehicles: Low Volume, High Expense

Interestingly, electric vehicles (EVs), while contributing a mere 1% to total claim volumes, exhibited the highest claim frequency at 29%. The repair costs for EVs are also the most severe, averaging Rs 39,021 per claim. This is primarily driven by the high cost of replacing expensive batteries and complex electronic components.

Geographic Variations in Claims

Geographically, Lucknow stood out with the highest claim frequency at 17%, suggesting a higher incidence of accidents and collisions within the city. The National Capital Region (NCR) also emerged prominently for high-cost repairs, with Noida recording one of the highest claim severities at Rs 25,157, followed closely by Gurgaon and Ghaziabad.

Claim Categories and Vehicle Profiles

Own-damage claims constituted the vast majority of motor insurance payouts, at 95%, typically resulting from minor accidents, bumps, and bumper-to-bumper repairs. Rare claim categories, such as vehicle theft, bodily injury, and death, though infrequent, trigger substantially larger payouts.

Petrol vehicles accounted for 68% of claim volumes. Newer vehicles, specifically those up to three years old, generated the highest claim severity at Rs 28,310, reflecting the rising cost of Original Equipment Manufacturer (OEM) parts.

Regional Claim Distribution

Regionally, the northern part of India leads the country in motor insurance claims, with the southern region following with a 31% share of the total.

Impact

• This report provides critical insights for automotive manufacturers and insurance providers regarding prevalent vehicle types, associated repair costs, and regional risk factors.
• It highlights the growing financial exposure related to electric vehicle repairs, potentially influencing future insurance pricing and product development.
• For consumers, it offers a view into the cost implications of owning different vehicle types and understanding repair expenditures.
• The data can help policymakers and urban planners identify accident-prone areas and inform infrastructure development.
• Impact Rating: 6/10

Difficult Terms Explained

• Claim Volumes: The total number of insurance claims filed for a particular category or period.
• Repair Costs: The average amount of money spent to fix damaged vehicles.
• Claim Frequency: How often claims are filed within a specific group or period.
• Claim Severity: The average cost of a claim, indicating how expensive repairs are when they occur.
• No Claim Bonus (NCB): A discount offered by insurers to policyholders who do not make any claims during the policy year, incentivizing claim-free driving.
• OEM Parts: Original Equipment Manufacturer parts, which are genuine parts made by the vehicle's manufacturer.
• Own-Damage Claims: Insurance claims filed to cover damages to the policyholder's own vehicle, usually due to accidents, theft, or natural disasters.