E20 fuel worries: Can your insurance claim be rejected? ICICI Lombard responds

ICICI Lombard General Insurance has clarified that motor insurance coverage remains fully valid even with the use of E20 petrol, amid growing concerns among vehicle owners over ethanol-blended fuel.

The insurer said claim settlement will continue to depend only on insured events such as accidents, theft, or other covered risks, and not on the type of fuel used in the vehicle.

“Claims are admissible based on the occurrence of insured perils such as accidents or theft. The type of fuel used in the vehicle is not a determining factor in claim admissibility,” ICICI Lombard said, adding that valid claims under conventional fuels will remain valid under E20 as well.

The insurer also described India’s ethanol blending programme as a “progressive and environment-friendly step” aligned with broader efforts to reduce emissions and crude oil dependence.

The clarification comes as E20 petrol, a 20% ethanol-blended fuel, continues to trigger debate among motorists over mileage drop, compatibility concerns in older vehicles, and long-term engine wear.

Government view on E20 fuel

These studies estimate a marginal 1-6% drop in fuel efficiency, depending on vehicle type, with minimal impact on E20-compatible engines. Older vehicles may experience higher wear in rubber and plastic components over time.

FAQs on E20 petrol and insurance impact

No. As clarified by ICICI Lombard, insurance claims are not linked to the type of fuel used. Claims depend only on insured events like accidents or theft.

No, fuel type alone is not a valid reason for claim rejection under standard motor insurance policies.

Older, non-E20-compatible vehicles may experience faster wear of rubber parts, slight performance issues, or reduced mileage over long-term use.

Yes, but marginally. Government estimates suggest a 1-6% reduction in fuel efficiency, though real-world impact may vary by vehicle.

E20 is being rolled out as the standard petrol grade in most regions, with limited or no availability of pure petrol in many cities.

Vehicle owners are advised to check manufacturer guidelines and monitor fuel system components such as hoses and gaskets during servicing.