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Business Standard
3 days ago
- Automotive
- Business Standard
E-20 compliance and insurance claim: Here's what you need to know
As more and more fuel stations start rolling out E-20 fuel (petrol blended with 20 per cent ethanol), consumers are debating its benefits and drawbacks. Over the past few weeks, social media has been flooded with posts about E20 fuel after several motorists reported lower mileage and suspected engine issues. While the government insists the impact on vehicles was marginal, insurance experts warn that there's another risk that's not getting enough attention, your motor insurance claim. Concerns around claim rejection Standard motor insurance policies in India often exclude damage caused by 'wrong fuel use.' This means if your vehicle isn't E20-compliant and suffers engine damage linked to E20 fuel, your insurer could deny or reduce your claim. 'Policies often exclude damage from using incorrect fuel types,' says Paras Pasricha, head of motor insurance at Policybazaar. 'If an investigation finds that E20 caused the damage in a non-compatible vehicle, insurers might deny or scale down the claim,' Pasricha said. Rahul Mathur, chief executive officer of Roinet Insurance Brokers, adds that even engine protection cover may not help. 'Some insurers consider using the wrong fuel as gross negligence, which is grounds to void a claim. Even if the owner didn't know their car wasn't compatible, it may not work in their favour during a dispute,' he said. Surender Tonk, vice-president of the Insurance Brokers Association of India, says there have been cases of claims being rejected for this reason. 'Insurers follow manufacturer guidelines. If your vehicle isn't certified for E20, you risk losing the claim,' he notes. Why fuel compatibility matters While most policy documents don't explicitly mention ethanol blends, they do include general clauses about taking reasonable care of the vehicle. According to all three experts, using a fuel blend not approved by the manufacturer could fall under 'gross negligence,' making the insurer legally entitled to refuse payment. Steps to protect yourself Experts advise: As the government rolls out E20 nationwide, motorists need to look beyond mileage debates. The wrong fuel might not just harm your engine, it could also leave you with a hefty repair bill that your insurer won't cover.
Hans India
3 days ago
- Automotive
- Hans India
Rain, Risk & Repair: 33% Surge in Claims, 80% Lack Engine Cover, Non-Metros Hit Hard
Key Insights at a glance Claim costs surge 33% during monsoon, driven by worsening weather, engine & electrical damage and poor road conditions. Protection Gap Persists: 80% without engine cover despite high RSA adoption Tier-2 & 3 cities drive 75% of monsoon claims amid poor resilience Nearly 13% spike in monsoon claims since 2023 claim rises 33% in monsoon, driven by engine & electrical damage During monsoon, the average motor insurance claim increases from ₹30,000 to ₹40,000, a 33% spike largely due to water-induced engine failure and electrical breakdowns. This sharp rise underscores the critical need for engine protection add-ons and proactive seasonal coverage planning. Gap Persists: 80% lack engine protection add-on With only 20% of policyholders opting for engine protection, a vast 80% remain exposed to water-related engine damage—one of the costliest and most common monsoon risks. Although 50% have zero depreciation cover, the other half still face higher out-of-pocket expenses, pointing to a significant protection gap during the monsoon season. News : ~75% of customers opt for RSA Add-On, high RSA adoption Nearly 75% of customers opt for the Roadside Assistance (RSA) add-on, which proves especially useful during the monsoon. This add-on proves useful during the monsoon for issues like vehicle breakdowns caused by water ingestion or electrical failures. see 3 in 4 monsoon claims, revealing deeper infrastructure gap Waterlogging, poor drainage, rain-induced collisions, and high vehicle density make urban centres namely Delhi, Himachal, Mumbai, Chennai, Pune, Nasik and Bengaluru as hotspots for monsoon-related motor insurance claims, yet 74–75% of all such claims between 2023 and 2025 came from Tier-2 and Tier-3 cities. This insight underscores deeper infrastructure vulnerabilities and lack of resilience in smaller towns across India. Trigger nearly 13 % Rise in Claims (2023–25) Monsoon months (June–September) account for an increasing share of annual motor insurance claims. Year on year, motor insurance claims rose by 3.2% in 2024 and 9.4% in 2025, leading to a 12.9% surge between 2023 and 2025- reflecting the worsening impact of weather and deteriorating road infrastructure. Lead with 54% of Monsoon Claims Hatchbacks account for 54% of monsoon-related claims, primarily due to their low ground clearance, as that increases vulnerability to water damage. Sedans (26%) and SUVs (20%) follow them. Account for 20% of Claims but Lead in Repair Costs Though SUVs make up just 20% of monsoon-related claims, they incur the highest average claim value at ₹60,000, compared to ₹35,000 for hatchbacks and ₹45,000 for sedans—highlighting fewer incidents but significantly higher repair cost. Spokesperson's Quote – Paras Pasricha, Business Head of Motor Insurance at said this year, the rains have exposed more risks than resilience. What's more concerning is that 80% of people remain unaware of critical protection covers like engine protection—a gap seen across both metros and non-metros. While metro cities like Delhi, Himachal, Mumbai, Chennai, Pune, Nasik, and Bengaluru report the highest number of claims, non-metros account for 75% of all monsoon-related motor insurance claims, driven by the sheer volume of Tier-2 and Tier-3 towns across India. To be better prepared for the realities of India's monsoon challenges, it is crucial for vehicle owners to opt for essential add-ons like engine protection cover, roadside assistance, Zero depreciation cover etc. These covers not only reduce financial burden during unexpected breakdowns but also offer much-needed peace of mind in adverse weather conditions.
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Business Standard
06-08-2025
- Automotive
- Business Standard
Claims rise 33% in monsoon as most car owners miss engine cover: Report
Average motor insurance claims in the country during monsoons have increased 33 per cent in the last two years despite people not buying cover for engines, according to data provided by Claims increased from Rs 30,000 in June to September 2023 to Rs 40,000 this year, said the digital insurance broker about the period of monsoon rains. Companies typically sell two kinds of motor insurance: standard cover for the entire vehicle and partial cover. Despite being among the most frequent and expensive monsoon-related repairs, only 20 per cent of motor insurance customers opt for the engine protection add-on. 'Engine failure due to waterlogging isn't covered by default in standard insurance. You need the engine protection add-on. Sadly, most people skip it, realising its importance too late,' said Paras Pasricha, business head, motor insurance, Policybazaar. Smaller towns face bigger risks Around 75 per cent of all monsoon motor claims are made in Tier-II and Tier-III cities. Poor drainage, potholed roads and rising 'vehicle penetration' in these towns are among reasons for the increase in insurance claims, according to Policybazaar. Rising claims point to a 'wider infrastructure gap and limited disaster resilience in smaller urban centres'. Roadside assistance Almost 75 per cent of motor insurance customers have bought roadside assistance (RSA), which is crucial during rain-triggered breakdowns. This cover typically includes towing, jump starts, and minor on-site repairs. Zero depreciation add-on However, only half of all customers have a zero depreciation add-on, which reduces out-of-pocket expenses during claims. Without it, policyholders may get only partial reimbursement for parts and repairs. Hatchbacks, due to their low ground clearance, account for over half (54 per cent) of monsoon claims. Sedans and SUVs follow at 26 per cent and 20 per cent, respectively. But when it comes to costs, SUVs top the list, averaging Rs 60,000 per claim. With a 13 per cent rise in monsoon-related claims since 2023, insurance experts advise proactive protection. A few hundred rupees more for an engine cover or zero-dep can save tens of thousands later. And with unpredictable weather becoming the new normal, monsoon-proofing your policy is no longer optional, it's essential.
Time of India
10-07-2025
- Automotive
- Time of India
Got 25% lesser payment against car insurance claim for damaged motor parts? Know why and how to avoid it
Academy Empower your mind, elevate your skills How does not having bumper-to-bumper coverage affect your final claim amount? Different car parts have separate depreciation rates Age of Vehicle % of Depreciation Not exceeding 6 months Nil Exceeding 6 months but not exceeding 1 year 5% Exceeding 1 year but not exceeding 2 years 10% Exceeding 2 years but not exceeding 3 years 15% Exceeding 3 years but not exceeding 4 years 25% Exceeding 4 years but not exceeding 5 years 35% Exceeding 5 years but not exceeding 10 years 40% Exceeding 10 years 50% How much extra do you have to pay for this additional cover? Zero-depreciation add-on not foolproof, does not cover this Engine damage due to water ingression, or when water enters your car's engine. This is covered separately, under the engine-protect add-on Tyre and tube depreciation Mechanical failure due to reasons other than an accident Maintenance, wear and tear, or consumables (except if a consumables add-on is bought separately) Your car isn't just a means of transport—it's a key tool for productivity for many, in addition to being a valuable asset. Naturally, if your car gets into an accident and sustains serious damage, you'd expect your car insurance to cover the repairs. But imagine the shock—both emotional and financial—when your damage claim of Rs 70,000 is settled for only Rs 49,000! Why is there a 30% gap in the final payout?It all comes down to one small but expensive mistake: depreciation. Yes, depreciation combined with the age of your vehicle can significantly reduce the amount you receive out of the complete motor insurance claim that you are entitled can you prevent this? Keep reading to learn why choosing a zero-depreciation add-on cover is crucial for getting the full insurance claim you your vehicle ages and experiences inevitable wear and tear from regular use, its value tends to decline over time. With each passing year, depreciation rises, meaning these parts will have a lower insured value if you don't have protection against when you file a claim for repair or replacement of your vehicle's parts, the insurer will take into account the depreciated, or reduced value of these parts for claim settlement, which ultimately results in a lower claim payout for you.A zero-depreciation cover, also known as bumper-to-bumper or nil depreciation cover, is an optional add-on to your car insurance that enables policyholders to receive the full claim amount for their damaged motor vehicle parts, without any deductions for Paras Pasricha, Business Head of Motor Insurance at 'The zero-depreciation cover is an extra add-on in your motor insurance policy that ensures no depreciation is deducted from the claim amount. Adding this cover ensures that the insurer pays the full cost of replacing damaged car parts without factoring in depreciation. Hence, a zero-depreciation cover significantly reduces out-of-pocket expenses when the car owner makes the claim'.Suppose your 3-year-old car had a violent collision with another vehicle, and the overall repair bill is Rs 80,000. Now, if you do not have a zero-depreciation cover, the insurer will calculate depreciation on plastic, metal, glass and other car components. If this depreciation is 30%, the final claim amount paid to you would be reduced to Rs 56,000. This means Rs 24,000 will be lost to depreciation, which you'll need to cover if you had a bumper-to-bumper cover added to your policy, there would be no depreciation-related deductions from your claim amount, meaning your insurer would pay your claim worth Rs 80,000 in full, provided there are no other compulsory deductibles, and you would be saved from paying Rs 24,000 from your Kumar, Founder, Square Insurance, suggests that this add-on is particularly useful for new and expensive vehicles, where part replacement expenses can be high. This is also highly recommended for electric vehicles (EVs), where the prices of components such as batteries and sensors are substantially has mandated specific rates of depreciation for car parts, depending on their material. This applies irrespective of the car's age, whether it is brand new or over 5 years you damage any of your car's rubber/nylon/plastic parts, tyres and tubes, batteries and air bags, depreciation will be deducted at the rate of 50% from the component's price. For fibre glass components, this stands at 30%For metal parts, the depreciation rate ranges from 5-50%, depending on the car's age. Zero depreciation cover provides the benefit of no deduction on the cost of car parts made of all these IRDAIAnd don't underestimate the financial consequences you'd face if these parts were damaged. Explains Tejinder Pal Singh, Vice President- Motor Insurance at Prudent Insurance Brokers, 'Don't discount the need for zero depreciation cover, since almost all vehicles have substantial plastic and metal parts. A headlight of a mid-segment car costs approximately Rs 30,000, a bumper costs nearly Rs 10,000, and the grill costs could touch Rs 5,000. So, an accident with just these three parts may mean depreciation charges of Rs 22,500 to the insured. For a high-end vehicle like Merc, Audi, etc., the same damage may cost Rs 3 lakh to the insured'.According to R Balasundaram, Secretary General, IBAI, premium pricing varies from insurer to insurer. While some insurers price the base premium cheap with a high price for this add-on, others may charge a higher basic price with a lower addition for this estimates that including a zero-depreciation cover generally adds 15-20% to the annual premium based on the car's age, model, and policy of the don't assume the zero-depreciation cover is foolproof. Experts note that this add-on does not cover the following aspects:Adds Balasundaram, 'Normally, zero depreciation cover is not available for vehicles older than 3-5 years.'Also, in case your car gets stolen or is irreparably damaged, i.e. where the costs of vehicle repair exceed 75% of its IDV (insurer declared value), zero-depreciation cover does not come into play. Notably, IDV is the current market value of your vehicle, taking depreciation into account. In other words, this is the maximum amount your insurer will pay out in case your vehicle is stolen or is damaged beyond a zero-depreciation add-on covers all accidental damages, other costs related to specific car parts like tyre damage, car keys loss or engine protection, have to be specifically covered under separate add-ons.
