Insurance will not be cancelled by using E20 ethanol-blended petrol, government clarifies

Amid the increasing use of ethanol-blended petrol in India, the government and insurance companies have provided an important clarification to address concerns raised by motorists regarding their vehicle insurance coverage. According to an NDTV report, the motor insurance of any vehicle is not automatically cancelled by using E20 petrol. Insurance companies have clarified that if E20 petrol has been filled in a vehicle, insurance claims cannot be rejected solely on this ground. This clarification comes at a time when the E20 blend, containing 20 per cent ethanol and 80 per cent conventional petrol, is becoming common at fuel stations across the country.

The primary objective of the government in promoting ethanol blending is to reduce dependence on imported crude oil, decrease pollution, and support local agricultural production. However, this transition had raised questions among vehicle owners, especially those with older vehicles and two-wheelers, regarding potential engine damage and insurance protection. Considering this confusion, it has been officially clarified that the use of E20 does not affect the validity of the insurance policy.

However, it is crucial to understand the difference between insurance validity and coverage for mechanical damage. A standard motor insurance policy primarily covers damage caused by accidents, theft, and other insured events. These policies generally exclude damage caused by gradual deterioration of the vehicle, mechanical breakdown, or regular wear and tear. This means that even if your insurance policy is active, if a mechanical fault occurs in the engine due to the fuel, it is not necessarily the case that the repair cost will be automatically paid by the insurance company.

Vehicles manufactured by vehicle makers from April 2023 have been designed to meet E20 material compatibility requirements. Nevertheless, compatibility may vary across different models and manufacturers. Therefore, vehicle owners are advised to check their vehicle's fuel specifications, the owner's manual, or the fuel compatibility sticker affixed to the vehicle. If a vehicle owner has doubts regarding their vehicle's compatibility, they should contact an authorised service centre.

Ethanol is a type of alcohol that is mixed with conventional petrol to be used as fuel in vehicles. The Government of India has long been promoting ethanol blending targets for environmental benefits and economic self-reliance. In previous years, the automobile industry also began modifying engine technology in line with this government policy. The aim of this policy is to reduce carbon emissions from vehicles, which can prove beneficial for the environment in the long run. Adapting to this new technology is an important phase for motorists, and this clarification regarding insurance protection will provide them significant relief.