NewsFlash Daily™
15 June 
ICICI Lombard cautions that using E20 fuel in non-compatible older vehicles may lead to engine damage-related insurance claims being denied
Insurance major ICICI Lombard has cautioned vehicle owners that using E20 fuel in cars not certified for ethanol-blended petrol could affect engine damage claims. As India expands the use of E20 fuel nationwide, experts are advising motorists to verify vehicle compatibility to avoid costly repairs and potential insurance disputes.
New Delhi: A major advisory from insurance giant ICICI Lombard has raised concerns among millions of vehicle owners across India. The insurer has warned that using E20 fuel in older cars not designed to run on ethanol-blended petrol could jeopardise insurance claims linked to engine damage.
The warning comes as India accelerates its transition towards cleaner fuels through the adoption of E20 petrol, a blend containing 20 per cent ethanol and 80 percent petrol. While the initiative aims to reduce crude oil imports and carbon emissions, experts caution that older vehicles may not be equipped to handle the fuel safely.
E20 Fuel Insurance Claim Risk Explained
According to ICICI Lombard, owners of vehicles manufactured before April 2023 should verify whether their cars are certified as E20-compatible before filling up with the blended fuel.
If a vehicle manufacturer has not approved E20 usage and the owner continues to use it, insurers may categorise any resulting engine damage as "improper use" or "negligence." In such cases, claims related to those damages could potentially be rejected.
"Using a fuel type not recommended by the manufacturer may be treated as improper usage, affecting claim eligibility for resulting damages."
The insurer clarified that this does not automatically invalidate the entire insurance policy. However, specific claims arising from such usage may face scrutiny.
How E20 Fuel Can Damage Older Vehicles
Automotive experts point out that ethanol possesses corrosive characteristics that can adversely affect components in vehicles not engineered for E20 fuel.
Potential issues include:
- Damage to rubber seals and gaskets.
- Deterioration of fuel pipes and connectors.
- Corrosion within fuel systems.
- Gradual wear and tear of engine components.
- Long-term performance degradation.
Such damage often develops over time rather than appearing immediately, making it difficult for vehicle owners to identify the root cause until significant repairs become necessary.
Consequential Damage May Not Be Covered
Insurance policies generally exclude "consequential damages," referring to losses that occur progressively due to continued operation despite underlying issues.
Even though the government has clarified that E20 usage itself does not cancel insurance coverage, insurers are not obligated to approve every claim if the damage results from operating a vehicle against manufacturer recommendations.
This distinction has become increasingly important as E20 fuel availability expands nationwide.
Which Vehicles Are E20 Compatible
India's automobile industry began introducing E20-compliant vehicles from April 2023 onwards in line with government directives.
Most vehicles manufactured before that period were not originally designed to accommodate higher ethanol concentrations.
Car owners are advised to:
- Check the vehicle owner's manual.
- Contact authorized dealerships.
- Verify manufacturer guidelines regarding E20 compatibility.
- Avoid assumptions based solely on fuel availability at petrol stations.
Growing Concerns Among Car Owners
Several motorists, particularly owners of certain European automobile brands, have voiced concerns on social media regarding engine behavior and electronic component issues after switching to E20 fuel.
While these complaints remain largely anecdotal and vary depending on vehicle make and condition, they have amplified public debate surrounding the transition to ethanol-blended fuels.
The advisory serves as a reminder that adopting greener alternatives requires adequate consumer awareness and technical preparedness.
What Vehicle Owners Should Do Now
Experts recommend that owners of older vehicles exercise caution before using E20 petrol. Understanding a vehicle's specifications could prevent expensive repairs and avoid complications during the insurance claim process.
As India moves steadily toward broader ethanol adoption, ensuring compatibility may prove just as important as embracing sustainability.
