Will Using E20 Fuel Affect Your Motor Insurance Claim? Here's What the Government Said

The government has clarified that the use of E20 fuel, comprising 20% ethanol and 80% petrol, does not affect the validity of motor insurance policies. The clarification comes after social media posts claimed that vehicle insurance claims could be rejected if damage was linked to the use of E20 petrol. 

The clarification is aimed at addressing concerns among vehicle owners as E20 petrol has become the standard fuel available at petrol pumps across the country. 

What Did the Government Say About E20 Fuel and Insurance Claims? 

In a post on X, PIB Fact Check termed the viral claim "fake" and stated that motor insurance policies remain valid with the use of E20 fuel. 

The government advised consumers to verify such claims through official sources before sharing or acting on them, seeking to address misinformation circulating on social media platforms. 

The clarification follows discussions suggesting that owners of older vehicles could face insurance claim settlement issues if vehicle damage was associated with the use of E20 petrol. 

ICICI Lombard Clarifies E20 Fuel Does Not Affect Insurance Coverage 

Amid the debate, ICICI Lombard also clarified that the use of E20 fuel does not invalidate motor insurance policies, and that claims are not rejected solely because a vehicle has been fuelled with E20 petrol. 

The insurer stated that the type of fuel used is not, by itself, a determining factor in the admissibility of an insurance claim, addressing concerns that E20 fuel could automatically lead to claim rejection. 

Read More: ICICI Lombard Clarifies E20 Fuel Does Not Invalidate Motor Insurance Policies or Claims 

E20 Fuel Insurance Concerns Among Vehicle Owners 

The issue gained attention because E20 petrol is now the standard fuel available at petrol pumps across India, leaving motorists with limited alternatives for lower ethanol-blended petrol. 

As a result, concerns regarding potential insurance implications spread widely on social media, particularly among owners of older vehicles who questioned whether using E20 fuel could affect future insurance claims. 

What Is the Government's Ethanol Blending Plan? 

The government's ethanol blending programme is aimed at reducing dependence on imported crude oil and improving the country's energy security. 

On June 5, 2026, Union Petroleum and Natural Gas Minister Hardeep Singh Puri launched E85 fuel at an IndianOil retail outlet in New Delhi. The rollout has started across 48 retail outlets operated by public sector oil marketing companies, with plans to expand the network to 500 outlets by December 2026 and around 5,000 outlets by December 2027. 

Conclusion 

The government has clarified that using E20 fuel does not result in the rejection of motor insurance claims, while ICICI Lombard has also stated that fuel type alone does not determine claim admissibility. The clarification comes as India continues to expand its ethanol blending programme and the availability of higher ethanol-blended fuels across the country. 

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