A recent industry study has highlighted a significant gap in the Indian smartphone market, revealing that fewer than one in 15 consumers maintains active device protection despite widespread awareness and frequent damage incidents.
The study, titled The Great Indian Smartphone Protection Crisis, was released on Wednesday by InsurTech platform OneAssist in partnership with Hansa Research. It is based on responses from 1,260 participants nationwide. According to the findings, 84 percent of Indian smartphone owners are aware of device protection plans, yet active adoption remains low at just 6 to 8 percent.
This low coverage rate stands against a backdrop of high damage frequency. The report notes that 72 percent of consumers have suffered accidental damage, and 82 percent have dropped their phones at least once. Cracked screens are the most common issue, reported by 70 percent of affected users. Everyday commutes represent the primary risk factor, with 36 percent of all damage incidents occurring when a phone slips from a pocket or bag. This outpaces other causes such as water exposure at 15 percent, walking or running at 13 percent, and travel at 12 percent.
The study also recorded the emotional impact of device damage. Thirty-five percent of respondents reported panicking immediately after dropping their phone, 24 percent had a conflict with someone over the incident, and 15 percent cancelled plans. Women reported a sharper panic response at 43 percent compared to 33 percent for men, and also recorded a higher incidence of accidental damage at 79 percent, versus 71 percent for men.
Market dynamics compound the issue. The study points out that average device prices in India have risen by 40 to 50 percent in recent years, while the replacement cycle has extended to approximately 40 months, up from two years a decade ago. In a market exceeding 650 million smartphone users, rising device costs make repair bills increasingly burdensome.
On the supply side, the research identifies three main barriers to adoption: cost concerns cited by 44 percent of non-adopters, limited understanding of plan benefits, and distrust in the claims process, with four in ten consumers doubting if claims will be honoured fairly. Subrat Pani, Co-founder of OneAssist, noted that affordability, simplicity, and trust remain the core challenges for the industry to address.
Meanwhile, the pre-owned device segment is emerging as an area of interest. Four in ten Indians have purchased a refurbished smartphone, with adoption higher in non-metro areas at 54 percent compared to 30 percent in metros. Among non-buyers, 70 percent stated that protection plans matter more for pre-owned devices than new ones, and 30 percent indicated that warranty availability would influence their decision to consider a pre-owned purchase.
"The findings by OneAssist and Hansa Research point to a critical trust and affordability challenge within India's InsurTech sector. When 84 percent of consumers are aware of protection plans but fewer than 8 percent actually use them, it signals a clear disconnect between product offerings and consumer confidence. For startups operating in device financing and insurance, simplifying the claims process and transparently addressing cost barriers will be essential to unlock the massive potential in both the new and refurbished smartphone markets." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
