Archive · 29 Jul 2026
Ethanol-blended petrol and car insurance: What you need to know
Using ethanol-blended petrol, like E20, in India does not affect your car insurance.
Experts say that as long as you use government-approved fuel, your insurance remains valid.
However, insurance does not cover gradual engine damage from using incompatible fuel.
It only covers sudden, accidental damage.
So, if your car's engine gets damaged over time from using E20, your insurance might not pay for the repairs.
But if there's an accident, your insurance will still cover the damage.
It's important to know what your insurance covers and what it doesn't.
Using ethanol-blended petrol (E20) does not invalidate comprehensive motor insurance policies.
Insurers cannot reject claims solely because a vehicle was running on ethanol-blended petrol.
Comprehensive motor insurance covers accidental external damage, not gradual wear and tear or mechanical deterioration.
Engine protection add-ons cover accidental engine damage, not mechanical issues from long-term fuel use.
Vehicle owners should understand what their insurance covers to avoid misconceptions about ethanol-blended fuel and insurance.
- Who
- Vehicle owners, especially those with older cars, and insurance experts like Hari Radhakrishnan from the Insurance Brokers Association of India (IBAI).
- What
- The impact of using ethanol-blended petrol (E20) on car insurance policies and potential claim rejections.
- When
- As India continues to expand the rollout of E20 fuel.
- Where
- In India, where the government is promoting ethanol blending as a public policy measure.
- Why
- To reduce crude oil imports, lower emissions, and clarify misconceptions about insurance coverage related to ethanol-blended fuel.
Ethanol-blended petrol affects insurance
Ethanol-blended petrol does not affect insurance
Insurance validity
Ethanol-blended petrol affects insurance
Some vehicle owners believe that using ethanol-blended petrol could invalidate their comprehensive motor insurance policy.
Ethanol-blended petrol does not affect insurance
Insurance experts clarify that using government-approved ethanol-blended fuel does not invalidate a comprehensive motor insurance policy.
Claim rejections
Ethanol-blended petrol affects insurance
There is a concern that insurance companies might reject claims if engine problems arise from using ethanol-blended petrol.
Ethanol-blended petrol does not affect insurance
Insurers cannot reject a claim solely because a vehicle was running on ethanol-blended petrol, as it is a government-approved fuel.
Coverage for engine damage
Ethanol-blended petrol affects insurance
Some motorists assume that if ethanol-blended fuel causes engine damage, the repair costs would be covered under their insurance policy.
Ethanol-blended petrol does not affect insurance
Comprehensive motor insurance does not cover gradual wear and tear or mechanical deterioration, including damage from prolonged use of incompatible fuel.
- Ethanol-blended petrol
- E20 fuel, a blend of 20% ethanol and 80% petrol, is government-approved and being rolled out in India to reduce crude oil imports and lower emissions.
- Comprehensive motor insurance
- Covers accidental external damage to the vehicle but not gradual wear and tear or mechanical deterioration.
- Engine protection add-on
- Covers accidental engine damage like water ingress or loss of lubrication, not mechanical issues from long-term fuel use.
- Insurance Brokers Association of India (IBAI)
- An organization that provides expert insights on insurance policies and their coverage.
- Hari Radhakrishnan
- Expert at the Insurance Brokers Association of India (IBAI) who clarifies the impact of ethanol-blended fuel on insurance policies.