ICICI Lombard, one of India's largest private general insurance providers, has issued a significant warning to owners of older vehicles: using E20 fuel, a blend of 80% petrol and 20% ethanol, in non-compatible cars could result in the rejection of engine-related insurance claims. This stance categorizes such usage as "improper use or negligence."
The insurer's cautionary statement, detailed in a recent blog post, highlights that vehicles sold before April 2023 were largely not designed to handle the higher ethanol content of E20 fuel. While the government has clarified that E20 fuel use does not automatically void an insurance policy, ICICI Lombard emphasizes that this differs from guaranteeing every related damage claim will be approved.
Understanding the Risk of E20 Fuel
The primary concern stems from ethanol's corrosive properties. "Ethanol is corrosive. In vehicles not built for it, it can degrade rubber seals, damage fuel lines, and wear down engine parts gradually," ICICI Lombard explained. This damage, often insidious and developing over time, can be difficult to detect immediately, complicating the claims process.
Standard insurance policies typically exclude "consequential damage"—damage that accumulates gradually rather than from a single incident like an accident. Even specialized engine protection add-ons, usually covering issues like water ingress or oil leakage, may not extend to chemical corrosion caused by unsuitable fuel.
Manufacturer's Stance and Owner Experiences
Adding another layer of complexity, manufacturers may also reject warranty claims for damage if their non-E20 compatible vehicles show issues from the fuel. Vehicle owners are advised to consult their car manuals or dealers to confirm compatibility.
Concerns among vehicle owners are already surfacing on social media. Sunderdeep Singh, a Ludhiana-based car reviewer, shared his experience with Business Today, noting spark plug and electronic power control light issues in his European brand cars, some purchased as recently as 2021 and 2022, which are now out of warranty. Singh questioned, "If you read the manual of E10 cars, it says you should not use ethanol-blended petrol above E10. If this is what the manual says, how can anyone assume these cars will not face problems due to E20?"
What Older Car Owners Should Know
- Check Compatibility: Confirm if your vehicle is E20-compatible, especially if purchased before April 2023.
- Potential Claim Rejection: Be aware that engine damage from E20 fuel in non-compatible cars might be considered "improper use" by insurers.
- Gradual Damage: Ethanol's corrosive effects are often slow and cumulative, making issues harder to trace and potentially dispute during claims.
The insurer strongly recommends that owners of older vehicles understand these risks proactively to avoid disputes at service centers.