E20 Petrol: As the government promotes ethanol to reduce dependence on petrol and diesel, auto insurance companies are making strange statements. India is rapidly moving towards high-ethanol blended petrol (E20 fuel). Meanwhile, a new fear has emerged among owners of older vehicles. What happens if the engine or any part of the vehicle is damaged due to the use of E20 fuel? Will the insurance company pay compensation in such a situation?

A ‘Frequently Asked Questions’ (FAQ) issued by ICICI Lombard, one of the country’s largest insurers, points out that claiming damages caused by E20 fuel may not be easy, especially for older vehicles that are not made for this fuel. Then this question came up.

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Will the company bear the cost of claims?

In the initial Frequently Asked Questions (FAQ), the company clarified that using E20 fuel does not automatically invalidate your car insurance policy. However, this does not mean that every claim to damage caused by E20 will be granted.

This objection has already been raised

The FAQ states that filling your vehicle with fuel that is not intended for use can be considered abuse or negligence. Insurance companies may review the claim from this point of view and the claim may be denied.

General motor insurance policies generally do not cover such losses, which occur gradually over time rather than from a single event (such as an accident).

Although people buy engine protection add-ons, they are mostly for problems like water intrusion or oil leaks. It is less likely to be effective against chemical corrosion caused by fuels.

Explanation of the company

When the controversy surrounding the E20 claim intensified and people started questioning the claim on social media, ICICI Lombard immediately issued a fresh clarification.

The company has assured customers that their motor insurance policies will remain fully valid due to the use of E20 fuel. Using E20 fuel even in older vehicles would not be considered ‘negligence’, as they consider the program to be an environmentally friendly initiative.

The company clarified that the adjudication of claims is not based on the fuel used in the vehicle, but on whether an unforeseen event has occurred.

The company said that if a claim is valid for regular petrol or diesel, it is equally valid for E20 fuel. ICICI Lombard does not reject claims solely on the basis of fuel consumption.

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