Key Highlights
- ICICI Lombard published a blog post on June 9 warning that E20 fuel damage claims on non-compatible vehicles may be treated as improper use or negligence, and could be rejected.
- The insurer subsequently issued a clarification saying it does not reject claims solely based on fuel type.
- However, the clarification does not address whether claims for damage specifically caused by E20 in older vehicles will be honoured.Â
This is the kind of story that directly affects every owner of a pre-2023 petrol car or two-wheeler in India. Read it carefully.
ICICI Lombard, India’s largest private general insurer, published a blog post on June 9 stating that using E20 fuel in a vehicle not designed for it could be treated as improper use or negligence. The consequence: your insurance claim for E20-related damage could be rejected.
E20 petrol is now the only blend available at pumps across India. You do not have a choice about whether you use it. It is in your tank whether you want it there or not. Vehicles manufactured before April 2023 were not engineered for E20. The higher ethanol content can corrode rubber seals, fuel lines, and injectors in older engines over time.
The Clarification That Did Not Fully Clarify
Following widespread coverage, ICICI Lombard issued a clarification. It stated that fuel type is not a determining factor in claim admissibility and that it does not reject claims merely on the basis of E20 usage.
The clarification does not say that E20-related engine damage will be covered. It says claims are not rejected solely because of the fuel used. That is a very different statement. If the damage is attributed to prolonged use of a fuel the vehicle was not designed for, the improper use angle remains relevant.
What This Means for You
If you own a petrol vehicle manufactured before April 2023, here is what you should do right now.
Check your policy documents for language around improper use and fuel compatibility. Speak to your insurer directly and get written confirmation of their position on E20 claims. Monitor your vehicle for early signs of fuel system issues, such as rough idling, fuel odour, or difficulty starting. Keep your service records up to date.
This situation also ties directly into the government’s push toward E25 and higher blends. If E20 is already creating this insurance ambiguity, the same question will resurface at every step up the ethanol ladder. The government, automakers, insurers, and fuel retailers need to align on this issue. Right now, it is the consumer who is caught in the middle.
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