Zuno General Insurance has launched a new motor-insurance add-on called Fuel Guard, designed to cover specified engine and fuel-system damage linked to blended fuels such as E20.
That sounds particularly relevant at a time when E20 petrol has become widespread and owners continue to debate its effect on mileage, performance and older vehicles.
But Fuel Guard is much narrower than an insurance policy against all possible E20 problems. It is available only for eligible newer cars, the fuel must already be approved by the vehicle manufacturer, and a claim requires actual physical damage serious enough to cause a breakdown.
The first limitation is the vehicle’s age.
Fuel Guard is available for eligible private cars manufactured on or after April 1, 2023. More importantly, the manufacturer must approve the particular blended fuel being used in that vehicle.
So if the car is being run on E20, it needs to be approved for E20.
The owner must also follow the manufacturer’s prescribed service schedule. Unauthorised modifications to the engine or fuel system can make the vehicle ineligible.
This means the cover is mainly aimed at relatively new cars that were designed and certified with blended fuels in mind.
Fuel Guard covers specified physical damage to engine and fuel-delivery components when that damage is caused by an approved blended fuel.
The covered parts include major items such as the cylinder head, crankshaft, connecting rods, pistons, fuel injectors, fuel pump and certain fuel lines.
There is another important condition. The damage must cause a breakdown, meaning the engine cannot start or run.
What it does not cover is equally important.
A reduction in fuel economy is not covered if there is no physical damage. Neither are normal wear and tear, gradual deterioration or damage arising from poor maintenance.
If a repair is already covered under the manufacturer’s warranty, a recall or the normal motor-insurance policy, Fuel Guard does not pay for it again.
The customers who may be most anxious about E20 are not necessarily the people this policy protects.
A car built before the E20-compliance era cannot simply become E20-compatible because its owner buys Fuel Guard. Insurance cannot change the materials used in fuel hoses, seals, pumps or other components.
Zuno’s requirement that the manufacturer must approve the blended fuel makes sense from an underwriting point of view, but it also makes the product less useful as a solution to the wider E20 compatibility debate.
The policy is instead protection against a narrower possibility: an eligible, compatible vehicle suffers defined engine or fuel-system damage linked to the blended fuel it was designed to use.
An engine or fuel-system repair can easily cost far more than a few thousand rupees, particularly if components such as injectors, pumps, pistons or the cylinder head are involved. Standard motor insurance generally does not cover a mechanical failure simply because the engine has developed a problem.
Fuel Guard potentially fills that gap when the failure meets its specific conditions.
But owners should read those conditions before paying for it.
Check whether your exact car is eligible, whether the manufacturer approves E20, what the insurer considers proof that blended fuel caused the damage, and whether any processing charges or deductibles apply.
It will not compensate you because E20 gives your car lower mileage. It does not cover normal ageing, and it does not solve compatibility concerns on an older car that the manufacturer never approved for E20.
Fuel Guard is therefore a useful new type of cover, but its name can sound broader than the protection actually is.
For an eligible E20-compatible car, it offers insurance against a defined fuel-related mechanical failure. For owners of older non-E20-compatible cars, which is where much of the concern lies, it is not the answer.
