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CNG Car Insurance - All You Need to Know

Updated On Oct 18, 2023

How to Add CNG to Car Insurance?

A lot of people are now-a-days considering alternative fuel options due to the rising concerns about pollution and increasing fuel prices. If you’re one of them, you can switch to a CNG car. It’s not just an eco-friendly option, but also budget-friendly. However, if you’re thinking of considering CNG options, it’s essential to understand how it can impact your car insurance

Today, we will understand the importance of CNG car vehicles, the process of getting a CNG kit installed, and how it affects the car insurance premium.

CNG Car Insurance - All You Need to Know

What's the Importance of CNG Car Vehicles?

CNG Car Vehicles are gaining popularity in India due to its numerous benefits - 

  1. Environmentally Friendly: CNG is a cleaner fuel compared to traditional petrol or diesel. It produces fewer emissions, reduces air pollution and contributes to a cleaner environment.
  2. Cost-Efficient: CNG is typically more affordable than petrol or diesel. This significantly reduces your fuel expenses over time, making it an attractive choice for budget-friendly car owners. 
  3. Better Fuel Efficiency: CNG provides excellent mileage, ensuring that you get more kilometers per rupee spent on fuel. This makes it an economical option for daily commuters.

How to Get a CNG Kit Installed in Your Car?

There are two methods for obtaining a CNG vehicle. The first is to install a CNG kit into your existing petrol or diesel car, while the second involves purchasing a brand-new CNG car. Regardless of your choice, both approaches will impact your car insurance premium.

The first option involves installing an external CNG kit in your current petrol or diesel vehicle. However, your existing car insurance policy is insufficient to cover this modification. So, it's important to notify your insurer as soon as you plan to install an external CNG kit in your vehicle.

When installing a CNG kit in your car, you should:

  1. Inform your Regional Transport Office (RTO) about the CNG kit installation to update your vehicle's registration certificate (RC book).
  2. Notify your insurance provider about the vehicle modification so that they can adjust your four-wheeler insurance policy to suit your CNG vehicle. This might result in an increase in your policy cover amount and the premium.

Purchasing a Brand-New CNG-Equipped Car:

Buying a CNG vehicle is an easier option, as it requires less effort. Vehicle registration is handled upon purchase of the CNG vehicle, with the RTO already acknowledging the CNG status and adding the CNG seal on the RC book.

Also, when you buy a new CNG car, you obtain a new insurance policy. 

How Will a CNG Kit Affect Your Car Insurance Premium?

Now, let's delve into the impact of a CNG kit on your car insurance premium. When you switch to CNG, your insurance coverage and premium are adjusted accordingly due to the increased fire and explosion risk associated with CNG fuel. Here's what you need to know:

  1. Premium Increase: Since CNG vehicles are at a higher risk of fire and explosion compared to traditional fuel vehicles, the premium for CNG Car Insurance is slightly expensive. 
  2. Documentation: You must provide proper documents to your insurance provider to ensure that your CNG kit is covered under your insurance policy. This typically includes the RTO certification of the CNG conversion and details of the CNG kit installation.
  3. Choice of Insurance Provider: Insurance companies may have different policies and premiums for CNG vehicles. It's advisable to shop around and compare insurance providers to find the best coverage and premium that suits your needs and budget.
  4. No-Claim Bonus (NCB): If you have a no-claim bonus on your existing insurance policy, installing a CNG kit might affect it. Some insurance companies may reduce your NCB due to the perceived increased risk associated with CNG vehicles. It's essential to clarify this with your insurance provider.

The Importance of CNG Car Insurance

Here's why having the right insurance for your CNG vehicle is essential:

  1. Financial Protection: Car insurance provides financial protection against damages caused due to accidents, damage, theft, or third-party liabilities. If you want to reduce the risk associated with CNG cars and avoid hefty expenses, you can consider comprehensive coverage. 
  2. Compliance with Regulations: It's mandatory to have at least third-party liability insurance for your car in India. 
  3. Peace of Mind: Knowing that you have insurance coverage for your CNG car can provide peace of mind while driving. You can focus on the road without worrying about unexpected expenses in case of an accident.
  4. Protection Against Third-Party Claims: Car accidents can result in damage to other vehicles or injury to third parties. Car insurance ensures that you are covered for such scenarios, saving you from potential legal and financial complications.

Types of CNG Car Insurance Policies

When it comes to insuring your CNG car, there are various types of insurance policies to choose from. Here are the primary options:

  1. Third-Party Liability Insurance: This type of CNG Car insurance is mandatory in India. It covers damage to third-party vehicles or property and injury to third parties in accidents. However, it does not cover damage to your own vehicle.
  2. Comprehensive Insurance: Comprehensive insurance offers the most extensive coverage. It includes coverage for damage to your own vehicle, theft, fire, and third-party liabilities. It's highly recommended for CNG car owners due to the increased risk of fire associated with CNG.
  3. Own Damage Insurance: This type of insurance covers damage to your own vehicle but does not include third-party liability coverage. While it may be cost-effective, it leaves you vulnerable to third-party claims.

Factors Affecting CNG Car Insurance Premium

Several factors can influence the premium you pay for your CNG car insurance:

  1. Type of Coverage: The level of coverage you choose (third-party, comprehensive, etc.) will directly impact your premium. Comprehensive coverage typically has a higher premium but offers more protection.
  2. CNG Kit Value: The value and type of CNG kit installed in your car can affect the premium. More expensive kits may lead to higher premiums.
  3. Car Model: The make and model of your car also play a role in determining your premium. High-end or luxury cars generally have higher premiums.

     4. No-Claim Bonus: You might get a discount in your premium if you have a no-claim bonus from previous insurance  policies.

When insuring your CNG car, consider the type of coverage that best suits your needs, provide the necessary documentation, and look around for the best insurance providers on InsuranceDekho. You can enjoy the benefits of CNG while ensuring that you have the right protection in place for your vehicle and peace of mind on the road. 

FAQs 

1: Why should I consider switching to a CNG car in India?

CNG is eco-friendly and cost-efficient as compared to petrol and diesel cars. Also, it provides better fuel efficiency and reduces carbon footprints. If you consider switching to a CNG car, you might benefit from government incentives. 

 

2: How does installing a CNG kit affect my car insurance premium?

Installing a CNG kit might lead to an increase in your car insurance premium. This is because CNG vehicles are considered to be at a higher risk of fire and explosion compared to traditional fuel vehicles. To mitigate this risk, insurance companies adjust the premium accordingly.

 

3: What documentation do I need for CNG car insurance?

To ensure that your CNG kit is covered under your insurance policy, you need to provide proper documentation. This includes the RTO certification of the CNG conversion and details of the CNG kit installation.

 

4: What are the types of CNG car insurance policies available in India?

There are several types of CNG car insurance policies, including:

- Third-Party Liability Insurance: This is the minimum legal requirement and covers damage to third-party vehicles and property and injury to third parties.

- Comprehensive Insurance: Offers the most extensive coverage, including damage to your own vehicle, theft, fire, and third-party liabilities.

- Own Damage Insurance: Covers damage to your own vehicle but excludes third-party liability coverage.

- Add-On Covers: These allow you to customize your policy with options like zero depreciation cover, engine protection, and roadside assistance.

 

5: How can I reduce my CNG car insurance premium?

You can reduce your CNG car insurance premium by considering factors such as the type of coverage you choose, the value of the CNG kit, your car model, your location, your driving history, and no-claim bonus if you’ve any. Maintaining a clean driving record and comparing quotes from different insurance providers can also help lower your premium.

 

6: Does installing a CNG kit affect my no-claim bonus (NCB)?

Yes, installing a CNG kit can affect your no-claim bonus. Some insurance companies may reduce your NCB due to the perceived increased risk associated with CNG vehicles. It's essential to clarify this with your insurance provider and choose a policy that best suits your needs.

 

7: Is CNG car insurance mandatory in India?

Yes, car insurance is mandatory in India. All vehicles, including CNG cars, must have at least third-party liability insurance to comply with legal requirements. Failing to have proper insurance can lead to legal penalties.

 

8: What should I do if I have an accident or face damage to my CNG car?

In case of an accident or damage to your CNG car, you should immediately inform your insurance provider and follow the claims process outlined in your policy. This typically involves documenting the incident, collecting evidence, and filing a claim with the insurance company.

 

9: What is the importance of CNG car insurance in India?

CNG car insurance is important for several reasons. It provides financial protection in case of accidents, damage, theft, or third-party liabilities. It ensures compliance with legal regulations and offers peace of mind while driving. Additionally, it protects you from potential financial and legal complications in the event of accidents or damage to your CNG car.

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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