- ICICI Lombard clarifies that using E20 fuel does not invalidate motor insurance policies
- Claims are assessed based on insured events, not the vehicle's fuel type
- The insurer does not consider E20 fuel use as negligence or improper vehicle use
The transition to ethanol-blended fuels (E20) in India has been picking up pace, but it has also triggered confusion among vehicle owners, especially around insurance claims. One of the largest insurance providers - ICICI Lombard, in a blog post, stating, "Using a fuel your vehicle was not made for can be treated as improper use or negligence. Insurers may review these claims from that angle, and rejection is possible." The netizens started talking about the issue in volume, highlighting it as another drawback of using E20 fuel.. However, ICICI Lombard General Insurance has now issued an official clarification, putting those concerns to rest.
ICICI Lombard Clarifies Motor Insurance Coverage with E-20 Fuel Usage
— ICICI Lombard GIC (@ICICILombard) June 15, 2026
ICICI Lombard General Insurance reaffirms that motor insurance policies remain fully valid by the use of E-20 fuel. We clarify that we do not treat usage of E-20 fuel in older vehicles as a negligence and we… pic.twitter.com/21OOvj1mPF
ICICI Lombard's Official Response:
The company quoted, "ICICI Lombard General Insurance reaffirms that motor insurance policies remain fully valid by the use of E-20 fuel. We further clarify that we do not treat usage of E-20 fuel in older vehicles as a negligence and we consider E-20 fuel program as a progressive environment friendly step.
Our insurance policies are designed to cover accidental damages, theft, personal accident for owner-drivers and co-passengers, as well as third-party liabilities, depending on the covers opted by the insured.
Claims are admissible based on the occurrence of insured perils such as vehicle accidents or theft. The type of fuel used in the vehicle such as Petrol, Diesel, CNG & so on is not a determining factor in claim admissibility. 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."
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What Was the Controversy About?
The issue gained traction after claims surfaced online suggesting that insurers were rejecting claims for vehicles damaged due to E20 fuel usage, particularly in older or non-compatible vehicles. Given that India is gradually moving towards higher ethanol blending, the reports raised serious questions about fuel compatibility and insurance coverage.
How Claims Are Actually Evaluated?
ICICI Lombard reiterated that insurance claims are assessed based on insured events, such as:
- Accidents
- Theft
- Third-party liabilities
- Personal accident coverage (where applicable)
The insurer clarified that claims are not rejected merely on the basis of fuel usage, ensuring that policyholders are protected as long as the incident falls under covered risks.
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Why This Matters for Vehicle Owners?
The clarification is significant, especially at a time when India is actively promoting ethanol blending to reduce crude oil imports and emissions. Many vehicle owners had concerns about whether switching to E20 fuel could impact their insurance coverage.
Certainly, ICICI Lombard's statement reinforces that there is no blanket exclusion for ethanol-blended fuel, and policyholders do not need to worry about claims being denied solely due to fuel choice.
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