E20 petrol (20% ethanol) can be a problem for older vehicles. According to ICICI Lombard, insurance claims for engine damage caused by E20 in non-compatible vehicles manufactured before April 2023 may be rejected. This will be considered negligence.
New Delhi: IASA new type of petrol is now becoming common at petrol pumps – E20 petrol. It contains 80% petrol and 20% ethanol. This step of the government is a big initiative towards saving the environment and reducing pollution. This is not a big deal for the owners of new vehicles, but for those who are driving old vehicles, it can create a new problem. The biggest concern is that petrol mixed with ethanol can damage the engines of old vehicles, and if this happens, will the insurance company bear the cost?
Now a big private insurance company of the country, ICICI Lombard, has clarified its position on this. The company says that if the use of E20 petrol causes damage to an old and non-compatible vehicle (which is not made for this petrol), then its insurance claim can be rejected. The company said that many vehicles manufactured before April 2023 are not designed for E20 petrol.
According to The Mint report, the company said this in one of its blog posts on June 9. According to the insurance company, using wrong fuel for the vehicle can be considered as ‘negligence’ or ‘misuse of the vehicle’. In such a situation, there is every possibility that the claim will be rejected. The company also said that E20 petrol is now easily available in many parts of India and there is a plan to implement it across the country by April 1, 2026, after which it will become difficult to get normal petrol. In such a situation, owners of old vehicles will not have much option left.
ICICI Lombard warned that while ethanol may be good for the environment, it affects the engine differently. This can reduce the mileage of the vehicle and in the long run, rubber seals, fuel lines and other engine parts can get damaged. This damage happens gradually, so it is difficult to catch and may be disputed at the time of claim.
However, the company also admitted that using E20 fuel will not void your insurance policy, but it does not mean that claims for all types of losses will be passed. This is because normal policies do not cover ‘consequential damages’. Therefore, there is a high possibility that the claim on damage caused by E20 will be rejected. The company also clarified that add-on covers like engine protection are also unlikely to help, as they are mainly for incidents like water logging or oil leaks.
ICICI Lombard has advised customers to read the policy terms and conditions carefully. If your car is made before April 2023, check with your car manufacturer to see if it is safe for E20 fuel. The company also suggested that using better quality premium fuel could be helpful to some extent. The Central Government has waived excise duty on petrol mixed with ethanol, which clearly shows that the government is serious about this policy. But this warning from ICICI Lombard shows that the times ahead may be a bit difficult for the owners of old vehicles.