The increasing adoption of E20 petrol in India has raised concerns about its impact on insurance claims. The debate took off after a post by an insurance company. ICICI Lombard suggested that using the recommended fuel for a vehicle could potentially be seen as negligent, leading many to believe that insurance claims related to the use of E20 fuel could be rejected.
Description of ICICI Lombard General Insurance
However, ICICI Lombard General Insurance has now issued an official clarification, stating that motor insurance policies remain valid even when E20 fuel is used and the company does not reject claims based on fuel type alone.In its statement, the insurer said it does not consider the use of E20 fuel in older vehicles negligent and considers the government’s ethanol blending program a progressive and environmentally friendly initiative. The company further clarified that claim acceptance is determined by insured events such as accidents, theft or other covered perils, and not by whether the vehicle is running on petrol, diesel, CNG or E20 fuel.According to ICICI Lombard, if a claim would normally be admissible for a conventional petrol vehicle, it would be admissible when the same vehicle is using E20 fuel. The insurer emphasized that it does not reject claims simply because the vehicle is fueled with ethanol-laced petrol.
India is moving towards higher blends of ethanol.
The clarification comes at an important time as India is ramping up its use of ethanol-blended fuel. E20 gasoline contains 20 percent ethanol and 80 percent gasoline. The government is promoting higher ethanol blending to reduce dependence on imported crude oil, lower emissions and support domestic biofuel production.This shift is already visible in the two-wheeler and passenger vehicle segments. Hero MotoCorp recently launched the Splendor+ Flex Fuel and HF Deluxe Flex Fuel motorcycles, both capable of running on ethanol blends up to E85. Similarly, Maruti Suzuki has introduced the Wagon R flex fuel prototype, which is designed to run on fuel containing 85 percent ethanol.The recent controversy arose when concerns arose online about whether damage caused by using E20 fuel in older, non-compliant vehicles could affect insurance coverage. The issue quickly gained attention on social media, with many consumers questioning whether insurers could deny claims linked to the use of ethanol-blended fuel.
