Motor Insurance Growth Surge Post New Motor Vehicles Act 2019

Recently, we were all in for a shock when the New Motor Vehicle Act was implemented by the central government, effective since the 1^st September 2019 in most states. The common man and his wallet may have let out a cry, but insurance companies, especially those selling motor insurances were the ones doing the happy dance.

After all, bike and car owners were now looking for a bike and car insurance they could befriend! Online, digital insurance companies were one to benefit most out of this.

Thanks to their hassle-free quick processes of buying an insurance online. The new age insurance company, Digit Insurance that currently holds 2.38% of the total market share in the motor insurance industry, was one of the few who received multiple friend requests a.k.a insurance policy sales.

Especially from two-wheeler riders since until now, it was estimated that up to 70% of two-wheelers rode around town, uninsured. But with the rise and implementation of strict fines, things are only changing multifold.

Let’s take a look at some of the statistics that evidently show the rise in sales and consequent growth of the motor insurance industry in India. Subsequently, people too are now safer than before- with the simple act of obliging to traffic rules and road regulations.

• Select states saw the highest jump in sales of Digit Insurance policies, such as New Delhi that saw a jump of 1371% sales followed by 818% in Jharkhand, 719% in Odisha, 679% in Chhattisgarh and 660% in Kerala.
• Other states too saw significant surges in sales. For example; Uttarakhand saw a 649% rise followed by Haryana by 478%, Meghalaya by 450%, Bihar by 388%, Andaman and Nicobar by 338%, Assam by 300%, UP by 298%, Himachal Pradesh by 235% and Chandigarh by 224% respectively.
• Within one week of the new bill implementation in September 2019, Digit saw a 163% rise in demand for insurance policies compared to that of August 2019.
• As per Google Trends, searches on two-wheeler insurances too grew 15 times within the first week of the new motor vehicle act’s amendments. Likewise, with searches on common insurance terms, types of two-wheeler policies and the new fines on traffic violations.

What is everyone so concerned, you ask? Well, no one wants to shell out money unexpectedly. Especially not when the reason behind the fine could have been dealt with a lot less.

For instance; two-wheeler insurance premiums start from around Rs 750, whereas the fine for not having one can cost you Rs 2,000 and possible time in prison (up to 3-months) whereas the second time offence can cost you a straight sum of Rs 4,000! No wonder, it rather makes sense to get your two wheeler insurance than be overly cautious of not being caught by a cop and shelling out a large amount of money!

This could also be a reason why there wasn’t as much as a surge in four-wheeler vehicles (although there was a slight rise) due to its slightly higher insurance premiums- that are largely dependent on the make and model of one’s car, and the level of a customer’s customization with add-ons.

However, whether you have a two-wheeler or four-wheeler and no matter how high or low is the fine or premium, an insurance for your bike or car protects you from so much more, from multiple unforeseen situations, apart from just the fear of running into a cop! 😉

Here’s a list of some of the popular violation fines as per the new amendments of the new Motor Vehicle’s Act. (you know, just in case you were looking for the list of fines as well 😊)