Car Insurance

All About CNG Kit and Car Insurance

By Admin
Apr 01, 2021

I have always wondered why somebody doesn’t do something about climate change. Then I realised that I am somebody.

One cannot stress enough on the importance of making concerted efforts towards saving the environment. CNG cars, which are more economical than petrol cars, are a step in the right direction as they help you reduce your carbon footprint significantly.

However, before you get a CNG kit fitted in your car, it’s important to be well-versed with all the information you need. Keep reading to know everything about CNG kits.

How does a CNG impact your insurance?

Your existing coverage won't be enough as CNG kits are associated with higher maintenance and damage costs.

You will have to pay higher premiums as the CNG cars are associated with higher risks and the risk factor is directly proportional to the premium amount. The additional premium that has to be paid for using a CNG kit is typically 4% – 5% of CNG kit value. The age and make of the car can ramp up this premium amount further by another 4% - 5 %.

You’ll need endorsement from the insurer on the car policy since retrofitting a CNG kit accounts for a major alteration to your automobile. Failure to do so might render the insurance contract void, hence do not forget to do this at the earliest!

An example showcasing the difference in the premium rates for different fuel variants of the car is shown below -

Make: Toyota

Model: Innova

Year Purchased: 2016

ConsiderationsPetrol (INR)Diesel (INR)CNG (INR)

IDV

Premium

3,25,926

12,750

2,99,188

11,982

3,30,000

13,224

Other Factors to consider before getting a CNG kit:

  • Your car might not be compatible with the CNG fuel system especially if it is an old model. Consulting an authorised dealer/ expert is advisable so that you can base your purchase decision on whether you can fit a CNG kit in your car.
  • CNG is a safer and cleaner fuel as it emits less carbon dioxide and is not flammable in nature due to high auto ignition temperatures.
  • Maintenance and installation cost can be high, and the amount may run into half a lakh or more depending on the car in question. It is also important to note that one needs government approval before installing a CNG kit. The registration certificate (RC) must be stamped with a ‘fuel change’ seal before use. This will also incur some expenses. However, this is a one-time expense and you’ll be saving a lot of money due to the lower cost of fuel.
  • You’ll save money on fuel in the long run since it offers a better mileage and costs less than half the value of petrol. The initial costs incurred may be recovered within a few years of regularly using the car.
  • You’ll have to identify specific petrol pumps since all fuel stations do not stock CNG refills. It might also eat into your time, so make sure that you do not undertake this activity on an otherwise busy day!
  • The car’s performance may change over time since the change in fuel might take a toll on the engine’s health. This might require you to service the car periodically. However, the difference in performance will be imperceptible if the car is a CNG-only variant.
  • You can enjoy better mileage and better fuel efficiency.

Summary

The aforementioned factors give a holistic assessment of all the considerations that are to be kept in mind while opting for a CNG car. The benefits guaranteed by a CNG car are far greater than other fuel cars and it is definitely an investment that will keep both your pocket and the environment happy.

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