ICICI Lombard General Insurance, one of India's largest private insurers, has issued a definitive clarification stating that motor insurance policies will remain fully valid even if vehicles use E20 fuel. This announcement aims to reassure policyholders amidst the country's push towards increased ethanol blending in petrol.
No Negligence Clause for E20 Fuel Use
The insurer explicitly stated, “We do not treat usage of E-20 fuel in older vehicles as a negligence.” This directly addresses previous concerns that using E20 fuel in non-E20 compliant vehicles might be considered “improper use or negligence,” potentially leading to claim rejections. An earlier blog post by the company, published on June 9, 2026, had contained such wording but has since been edited to remove these contentious phrases.
ICICI Lombard emphasized its view of the E20 fuel program as a “progressive environment friendly step.” The company affirmed that its insurance policies are designed to cover standard perils such as accidental damages, theft, and personal accident for owner-drivers and co-passengers, as well as third-party liabilities, depending on the specific coverage opted for by the insured.
Claim Admissibility Based on Peril, Not Fuel Type
According to ICICI Lombard, the admissibility of claims hinges on the occurrence of insured perils like vehicle accidents or theft. The type of fuel used—be it petrol, diesel, CNG, or E20—is not a determining factor in whether a claim is processed. “Accordingly, if a claim is admissible with conventional fuel, it is equally admissible with E-20 fuel and ICICI Lombard does not reject claims merely on the basis of fuel usage,” the insurer clarified.
This clarification comes as the Indian government plans to further increase ethanol blending in petrol beyond 20%. This strategy aims to achieve dual objectives: reducing India's reliance on imported fuel and boosting the income of farmers involved in ethanol production.