HDFC ERGO Bets on Service to Insure India's EV Two-Wheeler Boom

MUMBAI, India – December 30, 2025 – As India's streets hum with the quiet revolution of electric mobility, HDFC ERGO General Insurance has signaled a strategic pivot aimed at the heart of this burgeoning market: the electric two-wheeler rider. The company announced a strengthened focus on service-led claims support, a move that looks beyond policy documents to address the practical anxieties and evolving expectations of a new generation of vehicle owners.

This initiative comes as India solidifies its position as a global leader in the electric two-wheeler (E2W) space. The shift from internal combustion engines is no longer a distant prospect but a present-day reality, fundamentally reshaping risk patterns, repair ecosystems, and what consumers demand from their insurance providers.

The New Reality of Green Mobility

The growth of India's electric two-wheeler market has been nothing short of explosive. In the fiscal year 2023-24 alone, sales surged by over 30%, with more than 910,000 units sold. Projections indicate this is just the beginning, with some forecasts predicting a compound annual growth rate of over 28% through 2032. By the end of the decade, E2Ws are expected to constitute over 80% of total EV sales in the country.

This rapid adoption is fueled by a confluence of factors. Government initiatives like the now-concluded FAME II scheme and its successors, such as the PM E-DRIVE scheme, have provided crucial subsidies. These, combined with rising fuel prices and a growing environmental consciousness, have made electric scooters and motorcycles an attractive option for daily commuters, families seeking an affordable second vehicle, and last-mile delivery services.

However, this influx of new vehicles brings a different set of challenges. Congested urban roads increase the likelihood of accidental damage, while the high-tech nature of EVs introduces new concerns. As HDFC ERGO noted in its update, riders are no longer viewing insurance as a “once-a-year formality.” They are seeking a dependable support system that understands their daily reliance on their vehicles and can act swiftly when things go wrong.

Addressing the EV Rider's Dilemma

For all their benefits, electric two-wheelers present unique ownership hurdles that traditional insurance models are only beginning to address. The most significant of these is the battery, which can account for a substantial portion of the vehicle's total cost. An accident that damages the battery pack can lead to a crippling repair bill, a primary source of anxiety for owners.

Beyond the battery, owners face a nascent and often fragmented repair infrastructure. Unlike the ubiquitous workshops for conventional bikes, finding a garage with technicians trained to handle EV-specific components like motors, controllers, and complex wiring can be a challenge. This scarcity can lead to repair delays, questions about the use of genuine parts, and difficulties in getting claims processed smoothly.

This is the landscape HDFC ERGO aims to navigate with its service-led approach. The strategy focuses on demystifying the insurance process and providing tangible support at the moment of need. By offering both mandatory third-party protection and comprehensive policies, the insurer allows customers to choose their level of security. Critically, it highlights the availability of add-ons like Zero Depreciation cover, which prevents the value of parts from being reduced due to age at the time of a claim—a vital feature when dealing with expensive components like EV batteries.

The core of the proposition, however, lies in the claims experience itself. The company is bolstering its digital channels to allow for quick claim registration and transparent tracking. More importantly, it is focusing on its “partner garage networks,” which are essential for enabling cashless repairs. For EV owners, the value of this network will be determined by its inclusion of specialized, EV-ready workshops capable of providing reliable and timely service.

Shifting Gears in a Competitive Market

HDFC ERGO is not alone in recognizing the opportunity within the E2W segment. Major insurers like Bajaj Allianz, ICICI Lombard, and digital-first players such as Acko all offer policies for electric vehicles. Most provide a standard suite of products, including comprehensive cover and popular add-ons. The battleground, therefore, is shifting from product features to service quality and customer experience.

In this context, HDFC ERGO's public emphasis on a “service-led” model is a clear attempt at differentiation. The company is leveraging its established credibility in the motor insurance sector, where it has consistently maintained a high claims settlement ratio. For the 2022-23 fiscal year, its Motor Own Damage (OD) claims settlement ratio stood at over 96%, a figure that lends weight to its promise of reliability.

The message to consumers is that the value of an insurance policy is not just its price, but the confidence it inspires. When a two-wheeler—often a primary mode of transport for work or family errands—is off the road, the inconvenience is immediate. Prospective buyers are increasingly asking pointed questions about the claims process, documentation, and the speed of repairs. By focusing on making these processes simpler, more digital, and more supportive, HDFC ERGO is betting that a superior customer experience will build the long-term trust that turns a one-time purchase into a lasting relationship.

Insurance as an Enabler for India's EV Dream

The transition to green mobility is a cornerstone of India's broader economic and environmental goals. However, widespread adoption hinges on creating a robust and supportive ecosystem, and insurance plays a pivotal, if often overlooked, role. The perceived risks associated with a new technology—from high repair costs to uncertainty about service availability—can be a significant barrier for potential buyers.

Reliable and comprehensive insurance acts as a crucial safety net, mitigating these risks and boosting consumer confidence. When a rider knows that a potential accident won't result in an insurmountable financial burden or a lengthy, complicated claims process, the decision to purchase an EV becomes significantly easier. HDFC ERGO's initiative, therefore, can be seen as more than just a business strategy; it is a component that helps de-risk EV ownership and, by extension, accelerates the national push towards sustainable transportation.

This shift reflects a global trend where customers are rewarding insurers who prioritize simplicity, transparency, and dependable service. As the Indian market matures, the expectation for seamless digital journeys—from purchase and renewal to claims settlement—will only intensify. Insurers that successfully align their operations with these modern consumer demands are best positioned to lead the market. HDFC ERGO's stated focus on strengthening its proposition through relevant cover choices and reliable support suggests it is keenly aware that in the age of electric mobility, service is the new currency of trust.