Motor insurance in India is undergoing a fundamental transformation from traditional one-size-fits-all policies to personalised coverage tailored to individual vehicle and policyholder risks. According to reports from The Hindu BusinessLine, this shift is driven by a data-driven approach that allows insurers to offer more comprehensive and modular protection options. As reported by Amarnath Saxena, Chief Technical Officer–Commercial at Bajaj General Insurance, motor insurance in India has steadily evolved towards greater personalisation and customer-centricity, with customers now having flexibility to opt for coverages that make their insurance modular and comprehensive.
The personalisation is evident in the growing range of modular covers available to customers, including return to invoice, nil depreciation, consumables cover and engine protector. As reported by The Hindu BusinessLine, these modular options allow policyholders to build protection around their individual requirements. The coverage extends beyond basic policies to include bundled add-ons that combine multiple protections into single packages, providing customers with more comprehensive options at competitive pricing.
Personalisation is linking insurance more closely to actual vehicle usage and driving patterns through innovative pricing models. According to reports from The Hindu BusinessLine, usage-based motor insurance allows customers to declare the distance they expect to drive in a year, with the premium aligned to that usage. For example, a customer declaring an annual usage of 10,000 km can have the cover structured around the expected extent of vehicle use, creating a more accurate risk assessment and pricing model.
Recent developments show insurers expanding coverage to address emerging vehicle technology challenges. Zuno General Insurance has launched Fuel Guard, an industry-first add-on for eligible newer vehicles that covers specified engine and fuel-system damage caused by approved blended fuels. As India moves towards higher ethanol blending in petrol, this cover provides protection against accidental engine damage from approved blended fuels, though it's available only for vehicles manufactured on or after 1 April 2023 with manufacturer approval. For a compact SUV with ₹10 lakh IDV, the Fuel Guard add-on costs approximately ₹4,000-5,000.
Digital platforms are reshaping the motor insurance business model by simplifying the entire customer journey and prompting insurers to invest in automation, artificial intelligence, analytics and digital claims management capabilities. As reported by Ramit Goyal, Chief Distribution Officer at Generali Central Insurance, the motor insurance business is expected to become increasingly digital, data-led, and customer-centric. The IRDAI has pioneered personalised cover by permitting new and innovative products under its Regulatory Sandbox model, which are now becoming successful products in the market.
According to IRDAI data reported by The Hindu BusinessLine, motor insurance, the second largest after health in the non-life sector, stood at ₹1.08 lakh crore in gross direct premium in FY26, comprising own damage and third party cover. The transformation is expected to continue with connected vehicles potentially providing insurers with richer information on driving behaviour, vehicle usage, location, mileage and risk patterns, creating possibilities for more sophisticated risk-based pricing models in the future.
