E-20 compliance and insurance claim: Here's what you need to know

People are raising concerns around E20 non-compatible vehicles, like poor mileage. Experts say that insurers too could reject or cut claims if engine damage is linked to the fuel.

As more and more fuel stations start rolling out E-20 fuel (petrol blended with 20 per cent ethanol), consumers are debating its benefits and drawbacks. Over the past few weeks, social media has been flooded with posts about E20 fuel after several motorists reported lower mileage and suspected engine issues. While the government insists the impact on vehicles was marginal, insurance experts warn that there’s another risk that’s not getting enough attention, your motor insurance claim.

 

Concerns around claim rejection

Standard motor insurance policies in India often exclude damage caused by “wrong fuel use.”

 

This means if your vehicle isn’t E20-compliant and suffers engine damage linked to E20 fuel, your insurer could deny or reduce your claim.

 

“Policies often exclude damage from using incorrect fuel types,” says Paras Pasricha, head of motor insurance at Policybazaar.

 

“If an investigation finds that E20 caused the damage in a non-compatible vehicle, insurers might deny or scale down the claim,” Pasricha said.

 

Rahul Mathur, chief executive officer of Roinet Insurance Brokers, adds that even engine protection cover may not help.

 

“Some insurers consider using the wrong fuel as gross negligence, which is grounds to void a claim. Even if the owner didn’t know their car wasn’t compatible, it may not work in their favour during a dispute,” he said.

 

Surender Tonk, vice-president of the Insurance Brokers Association of India, says there have been cases of claims being rejected for this reason. “Insurers follow manufacturer guidelines. If your vehicle isn’t certified for E20, you risk losing the claim,” he notes.

 

Why fuel compatibility matters

While most policy documents don’t explicitly mention ethanol blends, they do include general clauses about taking reasonable care of the vehicle. According to all three experts, using a fuel blend not approved by the manufacturer could fall under “gross negligence,” making the insurer legally entitled to refuse payment.

   

Steps to protect yourself

Experts advise:

 

• Check E20 compatibility with your vehicle manufacturer or an authorised service centre. 
• Inform your insurer and keep proof on record. 
• Follow manufacturer-recommended fuel use strictly. 
• Avoid unauthorised repairs before the insurer’s surveyor visits. 
• Maintain regular servicing to reduce the chance of disputes.

 

As the government rolls out E20 nationwide, motorists need to look beyond mileage debates. The wrong fuel might not just harm your engine, it could also leave you with a hefty repair bill that your insurer won’t cover.