Rising fuel prices have pushed many car owners in India towards Compressed Natural Gas (CNG). CNG costs significantly less than petrol and produces far fewer emissions, making it a popular choice for daily use. But switching to CNG is not just a matter of getting a kit fitted.
Fitting a CNG kit in your car is a vehicle modification. Under Indian law, every modification must be declared to the Regional Transport Office (RTO) and to your car insurance provider. If you skip this step, your insurer can legally reject your claim, or even declare your policy void.
This guide explains how to add CNG to your car insurance policy in India, what documents you need, and how your premium changes.
What Is a Bi-Fuel Kit in Car Insurance?
In insurance terminology, a CNG or LPG kit fitted alongside your car's existing fuel system is called a bi-fuel kit. A car that runs on both petrol and CNG is classified as a bi-fuel vehicle.
Your standard car insurance policy covers the vehicle as it was originally manufactured. It does not automatically extend to cover the CNG kit or the additional risk it brings. This is why you need to declare the kit to your insurer and get a bi-fuel kit endorsement added to your policy. Without this endorsement, any claim involving the CNG kit can be rejected.
Two Ways to Have a CNG Car in India
1. OEM (Factory-Fitted) CNG Kit
Many car manufacturers in India now offer CNG variants straight from the factory. The RTO registers the vehicle as a CNG car, and the Registration Certificate (RC) already shows the fuel type as CNG. When you buy a new factory-fitted CNG car and take out insurance, the insurer is already aware of the CNG system through the registration records.
Always confirm with your insurer that the CNG kit is listed in your policy schedule, even for factory-fitted cars.
2. Aftermarket (External) CNG Kit
You can also get a CNG kit fitted in an existing petrol car at an authorised service centre. This is the route most existing car owners take to save on fuel costs. In this case, the RTO and your insurer are not automatically notified. You need to inform both of them yourself.
Always get the kit installed at a Government-recognised CNG fitment centre. Kits installed at unauthorised outlets may not qualify for insurance endorsement.
Is It Mandatory to Declare a CNG Kit to Your Insurer?
Yes, it is. Two separate legal requirements make this non-negotiable.
Motor Vehicles Act, 1988: Any alteration that changes a vehicle's original specification must be reported to the RTO. Fitting an aftermarket CNG kit counts as such an alteration. You must get your RC amended to reflect the change in fuel type before driving the car.
IRDAI Guidelines: The Insurance Regulatory and Development Authority of India (IRDAI) requires all vehicle modifications to be declared to your insurer. Failing to disclose a modification is treated as material non-disclosure, which can result in your claim being rejected or your policy being cancelled.
How to Add CNG to Your Car Insurance: Step-by-Step Process
Follow these steps after getting an aftermarket CNG kit fitted in your car.
Get the kit installed at an authorised centre. Use only Government-approved CNG fitment centres. This is required for the RTO to accept the endorsement and for your insurer to process the policy change.
Get your RC amended at the RTO. Visit the RTO where your car is registered and submit the required documents. The RTO will update your RC to show the new fuel type. Keep a copy of the updated RC before contacting your insurer.
Inform your car insurance provider. Contact Zurich Kotak General Insurance Company (India) Limited as soon as possible after installation. Do not wait until your next car insurance renewal .
Submit the required documents. Your insurer will ask for supporting paperwork (see the Documents section below).
Pay the additional premium. Your insurer will calculate the extra premium based on the kit's value and the applicable IRDAI-mandated charges.
Receive your endorsement certificate. Your insurer will issue a policy endorsement confirming that the CNG kit is now covered. Keep this document with your other insurance papers.
Documents Required for CNG Endorsement
When you contact your insurer to add CNG cover, keep these documents ready:
Updated RC copy, showing CNG as the fuel type
Invoice or bill from the authorised CNG kit installer
CNG kit installation certificate, including kit model and serial number
Existing insurance policy number and schedule
Proof of identity, if required by the insurer
How Does a CNG Kit Affect Your Car Insurance Premium?
Adding a CNG kit does increase your premium, but the increase is modest compared to the savings on fuel costs. Here is how the premium is affected.
1. Additional Third-Party (TP) Premium
IRDAI has fixed an additional third-party liability premium of ₹60 for all CNG and LPG kit-fitted cars, whether factory-fitted or externally fitted. This applies to both liability-only and comprehensive policies.
2. Own Damage (OD) Premium
The value of the CNG kit is added to your car's Insured Declared Value (IDV) . A higher IDV results in a slightly higher own damage premium. The increase depends on the cost of the kit you have installed.
3. Which Policy Types Cover a CNG Kit?
Comprehensive car insurance : Covers your car, the CNG kit, and third-party liability. This is the recommended option for full protection.
Own damage (OD) insurance : Covers damage to your car and the CNG kit. Does not include third-party liability cover as a standalone policy.
Third-party-only insurance: Covers only third-party liability. It does not cover damage to the CNG kit itself. You cannot add CNG kit coverage to a third-party-only policy.
What Happens If You Do Not Declare a CNG Kit?
Not informing your insurer about a CNG kit puts your claim at serious risk.
Your insurer can reject your claim if an accident occurs and the undeclared CNG kit is found to have contributed to the damage.
Non-disclosure is treated as misrepresentation under insurance law, which can result in your policy being cancelled.
You may also face penalties under the Motor Vehicles Act for driving with an unregistered modification.
Paying a small additional premium now is far less costly than losing your entire claim later.
Conclusion
Switching to CNG is a practical way to cut fuel costs and reduce emissions. But protecting your car properly means making sure your insurance keeps up with your modifications. Informing your insurer, getting the bi-fuel kit endorsement, and updating your RC keeps you legally covered and financially protected.
At Zurich Kotak General Insurance Company (India) Limited, updating your car policy for a CNG kit is a straightforward process. Keep your documents ready, inform us promptly after installation, and we will take care of the rest.
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Frequently Asked Questions
Does fitting a CNG kit always increase my insurance premium?
Yes. IRDAI mandates an additional ₹60 on the third-party premium for all CNG kit-fitted cars. The own damage premium also increases because the kit's declared value is added to the IDV.
Can I add CNG coverage to a third-party-only policy?
No. A third-party-only policy covers liability to others only. To get the CNG kit covered against damage, you need a comprehensive or own damage policy.
What is bi-fuel kit cover in car insurance?
Bi-fuel kit cover is an endorsement added to your car insurance policy when your car is fitted with both a petrol engine and a CNG or LPG kit. It extends your policy to cover damage to the kit and the additional third-party risk. Without this endorsement, your policy does not cover anything related to the CNG kit.
Do I need to visit the RTO before informing my insurer?
Yes. You should first get your RC amended at the RTO to reflect the CNG fitment. Then inform your insurer and submit the updated RC as part of the endorsement documentation. Both steps are required.
How long does it take to get the endorsement?
Most insurers process the endorsement within a few working days after receiving complete documents. Check directly with your insurer for the exact turnaround time.
Is a factory-fitted CNG kit covered automatically under insurance?
When you buy a new factory-fitted CNG car, the RTO registration already reflects the CNG fuel type. Your insurer is informed through the vehicle details. However, always verify with your insurer that the CNG system appears in your policy schedule.
Is it necessary to update my insurance if I modify my car with a CNG kit?
Yes, it is necessary under both IRDAI guidelines and the Motor Vehicles Act. Driving with an undeclared CNG kit is a legal risk and could result in your claim being rejected.
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