As monsoon rains continue to sweep across India, drivers are concerned about the maintenance of their vehicles, especially in the face of any adversity, accident, or malfunction. To be one step ahead of any such situation, it's always advisable to choose a comprehensive insurance policy rather than just mandatory third-party coverage. However, affordability remains the foremost concern for motor insurance customers according to a recent report by Policybazaar, an insurance company.
Moreover, customers are increasingly preferring roadside assistance as their most sought-after add-on feature in motor insurance policies, the report finds.
“The own damage component of a comprehensive policy protects you from significant expenses that could result from rainfall damage. While a comprehensive policy offers broad protection, it may not be sufficient in an excessive rainfall/flood scenario. Standard plans often don't cover costs related to water ingress, engine damage, or hydrostatic locks, which are specific to such disasters,” says Nitin Kumar, Head - Motor Insurance, Policybazaar.com.
What are customer’s priorities in motor insurance?
Around 29 per cent of customers prioritise affordability, the report finds. This indicates a strong demand for cost-effective insurance solutions. This preference also underscores a growing awareness among consumers about managing expenses, especially in an economic climate where every rupee counts.
As much as 21 per cent of customers value the brand's reputation which reflects a desire for trust and reliability in service providers, with consumers seeking insurers known for their integrity and consistency.
Subsequently, 19 per cent prefer excellent customer service calling for better responsive and supportive interactions. The quality of customer service can significantly influence customer loyalty and satisfaction. Some 16 per cent of customers are looking for comprehensive coverage features, seeking policies that offer extensive protection. Since claim settlement is usually the most crucial aspect of buying insurance, 15 per cent of customers want a smooth and efficient claim process, underscoring the need for hassle-free claim handling.
Snapshot of Customers Preferences vis-a-vis motor insurance:
Affordability: 29% consider affordability as a top priority
Brand reputation: 21% prioritise the brand's reputation
Customer service: 19% value top-notch customer service
Coverage features: 16% look for comprehensive coverage features, seeking policies that offer extensive protection
Claim Process and settlement: 15% focus on a smooth and efficient claim process, highlighting the need for hassle-free claim handling
Roadside Assistance, the most preferred add-on
Policyholders increasingly are leaning towards opting for roadside assistance coverage. According to the report, around 60 per cent of customers prefer roadside assistance as a must-have add-on in the event of emergency support.
“If a vehicle breaks down, it can leave you stranded. This cover ensures you can arrange for vehicle pick-up and repair, providing critical support when help might be hard to find. This add-on can only be purchased with a comprehensive policy,” says Kumar.
When struck on the roadside with a damaged vehicle, you can make use of your roadside assistance cover. “You simply need to call the roadside assistance toll-free number and the insurance company will send the assistance to your exact location within 15-30 mins. The roadside assistance is available 24/7,” Kumar informs.
Around 55 per cent of buyers opt for ‘zero depreciation’ add-on cover which offers greater financial protection by covering the full cost of repairs without factoring in depreciation of your vehicle. 20 per cent of customers prefer opting for engineer protectors and consumables as their add-ons.
Customers prefer these add-ons:
Roadside assistance: 60% prefer this cover highlighting the importance of emergency support.
Zero depreciation: 55% opt for this add-on, which offers greater financial protection.
Engine protector: 20% seek this coverage, particularly beneficial during monsoon seasons.
Consumables: 20% choose this add-on to cover the cost of consumables.
Key lock replacement: 18% value this coverage for added security.
Invoice price cover: 10% prefer this to ensure full reimbursement in case of total loss.
Seasonal Coverage needs during Monsoon
The report finds that during the monsoon, 50 per cent of customers seek roadside assistance, and 30 per cent opt for engine protector coverage. This reflects a heightened awareness of the risks posed by weather conditions.
Roadside assistance: 50% seek this coverage to handle emergencies.
Engine protector: 30% prefer this to protect against water damage.
Return to invoice price cover: 20% opt for this to ensure full value reimbursement.
Around 20 per cent of policy buyers opt for RTI or Return to Invoice which is a cover that enables you to receive compensation when a car is stolen or when it’s in a condition of ‘beyond repair.’
A shift towards Personalised Motor Insurance with PAYD
As per this study, more than 1 in 3 customers opt for Pay As You Drive plans (PAYD), while 3 in 4 tend to renew them, indicating a shift towards personalised motor insurance coverage. The report shows notable regional variation, with the highest uptake in the South (55 per cent) and the lowest in the North (36 per cent). The report also highlights the most popular distance slabs, with 30 per cent choosing the 5000 km option, followed closely by 7500 km and 10000 km options.
Popular distance slabs preferred by customers:
5000km: 30% of customers
7500km: 25% of customers
10000km: 25% of customers
2500km: 20% of customers
Top cities using PAYD plans:
Delhi: 8%
Bangalore: 5%
Mumbai: 3%
Pune: 2%
Gurgaon: 2%
The report concludes that the adoption of PAYD plans is highest in the metros as they collectively account for a significant percentage of insured vehicles. Additionally, 20 per cent of these customers often opt for top-ups, showing flexibility in their usage needs.
Where metropolitan areas account for 40 per cent of the motor insurance market, there is a growing trend in smaller cities as well, with tier-2 and tier-3 cities showing a 13 per cent increase in online adoption of motor insurance.
The best way to ensure your and your vehicle’s safety is by adding appropriate riders to your policy. Kumar suggests the following add-ons as must-have for customers:
Engine protection cover: This essential add-on protects your engine from liquid damage due to water ingress, which is not covered under a regular policy. It also covers engine breakdowns and hydrostatic locks.
Consumables cover: Extended exposure to water can damage lubricants, engine oil, and the gearbox. Since standard policies don’t cover these damages, opting for a consumables cover is wise.
Nil Dep: This covers an end-to-end cover to the car & should be taken with the other recommended add-ons.
Moreover, vehicle owners should know that a normal comprehensive policy does not cover the complete costs in case of damage to the engine. Therefore adding additional coverage can insure your vehicle from extended and seasonal damages.
