E20 Fuel: ICICI Lombard Clarifies Insurance Coverage Remains Unaffected

ICICI Lombard Insurer has rolled out a clarification on the use of E20 petrol, stating that motor insurance policies remain fully valid regardless of whether a vehicle is running on conventional petrol or the ethanol-blended fuel. The statement comes after reports and online discussions suggested that claims linked to E20 fuel usage in older vehicles could face rejection.

In its official response, the insurer said it does not consider the use of E20 fuel in older vehicles as negligence and states that claim admissibility is not determined by the type of fuel used.

"ICICI Lombard General Insurance reaffirms that motor insurance policies remain fully valid for the use of E-20 fuel. We further clarify that we do not treat the usage of E-20 fuel in older vehicles as negligence, and we consider the E-20 fuel program as a progressive, environmentally friendly step," the company said.

Also Read: Maruti Suzuki Wagon R Flex Fuel Priced At Rs 7.24 Lakh

The clarification follows attention around an earlier ICICI Lombard blog that discussed the implications of using E20 fuel in vehicles that were not originally designed for higher ethanol blends. In the blog, the insurer noted that while E20 is a cleaner and more environmentally friendly fuel, not all engines are engineered to run on it.

"Ethanol-made fuel, E20, is environmentally friendly and less expensive than regular fuel. However, before you think you have found a perfect substitute for regular fuel, it is essential to know that not all engines are built to run on ethanol-blend fuel. Ethanol has different combustion properties and can be more corrosive than pure gasoline," the blog stated.

The blog also pointed out that vehicles designed for E20 fuel typically feature reinforced fuel lines and gaskets, revised fuel mapping systems and, in some cases, higher compression ratios to improve efficiency. As a result, ICICI Lombard had advised owners to verify whether their vehicle was E20-compatible before making the switch.

"First, check your car's engine. If it was built to run on E20, you are good to go. However, if not, you may need to contact your car manufacturer for advice before switching to E20 fuel," the blog added.

Also Read: E85 Fuel Priced At Rs 82.12 Per Litre In Delhi; First E85 Station Inaugurated

The discussion gained traction because E20 petrol has effectively become the standard fuel available across much of the country as part of India's ethanol-blending programme. While most vehicles introduced under the BS6 Phase 2 norms were developed with E20 compatibility in mind, a substantial number of older vehicles on Indian roads were originally designed for lower ethanol concentrations.

ICICI Lombard's earlier blog had also highlighted that damage developing gradually over time due to fuel-related wear could potentially fall under the category of consequential damage, which is generally excluded under standard motor insurance policies. This led to concerns among vehicle owners that E20-related damage claims could face additional scrutiny.

However, the insurer has now sought to clear the air by stating that claims continue to be evaluated based on insured events covered under the policy, such as accidents, theft, personal accident cover and third-party liabilities.

"Claims are admissible based on the occurrence of insured perils such as vehicle accidents or theft. The type of fuel used in the vehicle, such as Petrol, Diesel, CNG, & so on, is not a determining factor in claim admissibility. Accordingly, if a claim is admissible with conventional fuel, it is equally admissible with E-20 fuel and ICICI Lombard does not reject claims merely on the basis of fuel usage," the company said.

The clarification is expected to provide some reassurance to owners of older vehicles amid the ongoing transition towards higher ethanol-blended fuels. For now, ICICI Lombard maintains that insurance coverage remains governed by policy terms and insured risks, rather than the type of fuel being used in the vehicle.