Insurance Guide for CNG & LPG-Converted Cars 2025

Posted on: Jun 12, 2025 | 3 mins | Written by: HDFC ERGO Team

Insurance Guide for CNG & LPG-Converted Cars 2025

Insurance Guide for CNG & LPG-Converted Cars 2025

Thousands of drivers have installed compressed natural gas or liquid petroleum gas kits because of higher fuel prices and stricter emission rules. This switch makes more changes than just the engine bay. It gives insurers new risk factors to consider when setting their rates.

Getting alternate fuel car insurance is no longer a choice if you drive one of these cars; it's a must.

Market Momentum Behind Gas-Powered Conversions

In 2024, the number of gas-powered passenger cars registered rose by 46% yearly. Their share of all LPG car sales increased to about 30% as a result. At the same time, by 2032, the total market for cleaner energy is expected to reach USD 101 billion.

This means that growth will last for a long time. To remain legally compliant and financially secure, owners who convert must now reveal the new kit and update their vehicle insurance.

Certification Matters for LPG Kits

Although some CNG models have an LPG conversion already installed, most need an official RTO endorsement after the installation. Not doing this can make claims under LPG vehicle insurance in India invalid.

It could get you fined and make it harder to sell in the future. Keep the latest registration smart card and the proof of approval for the kit in your glovebox at all times.

Premium Impact of CNG Conversions

When you tell your insurance company, they add a small fee to account for the higher fire risk that comes from pressurised tanks. IRDAI currently sets third-party responsibility at ₹60 per CNG kit, whether from a plant or an outside source.

For that small fee, CNG car insurance is one of the cheapest ways to keep your car on the road. You can do that while paying up to 60% less per kilometre to run.

What Exactly Gets Covered?

Policies that cover everything instantly protect the car against damage from accidents, fire, theft, and harm claims made by third parties. However, the CNG/LPG kit creates new risks that only become apparent when the insurance company officially approves the change.

When you get an alternate fuel car insurance, the policy plan lists every high-pressure part in detail. There is no room for disagreement among assessors.

• Cylinder and valve harm from hits or leaks that happen by chance

• Kit theft (full or partial), which includes the wire connections and brackets

• An explosion or flashback fire that damages the mixer or reducer

• Filters, high-pressure lines, and a computer control module (ECM)

• Tow and workshop labour costs when a gas-related problem stops the car from moving.

There are the same deadlines for processing claims as for regular fixes, as long as you send in the RTO authorisation and kit invoice.

Must-Have Add-ons and Endorsements

By picking the right add-ons, you can close the gaps that gas kits create. A study shows that 95% of new buyers now choose Zero-Depreciation cover. This shows how important it is to have the right extras.

•Bi-Fuel Kit Endorsement: It is necessary for retrofits. It lists cylinder, reducer, and valves so that alternate fuel car insurance can pay for kit-specific losses.

•Zero-Depreciation: It gets rid of reductions by parts. With 95% acceptance, it keeps owners from paying a lot of money to replace damaged plastic or rubber after an accident.

•Engine-Protect: In cases where water gets in, oil leaks or blow-back damages happen, this policy pays for the repairs. It helps protect the ECM unit and the expensive injectors.

•Roadside Assistance: It offers on-site repairs for gas leaks, refills, and towing. It helps keep drivers from getting stuck on the highway, which can happen when cylinder pressure drops quickly.

There is a small fee for each additional feature of vehicle insurance.

Regulatory Compliance Checklist

It's not just paperwork to keep the strategy up to date. National transportation rules say retrofits must be approved within seven days of being put in. If they don't, drivers could face fines similar to or higher than the difference in costs for car insurance in India.

• Update the smart card with your RTO-approved registration to say "Bi-Fuel" under "Fuel Type."

• Keep the Form 22-A health and emission compliance certificate that the authorised installer gave you.

• Keep the original tax bill that lists the cylinder's serial number, valve type, and pressure grade so that you can evaluate your claim.

• Scan the documents and upload them to the insurance company's website. Starting in January 2026, insurance companies will accept digital copies.

Rule 50A says that not showing any of these papers during random traffic checks can lead to fines of up to ₹5,000 per infringement.

How to Keep Premiums Manageable?

It shouldn't break the bank to switch to CNG/LPG. You can still get a lower car insurance rate with a few smart moves. First, think of the kit itself as an extra safety measure. Then, make the rest of the strategy fit your risk tolerance.

• Put in an AIS-approved CNG/LPG kit. Insurance companies see approved gear as lower risk, which lowers the fire risk load.

• Choose a bigger voluntary deductible if you want to. Minor fixes that you do yourself can cut the base price by 15–20%.

• Combining personal accident and rider responsibility into one plan is a good idea. Putting goods together is cheaper than buying different add-ons.

• You can get a 50% No-Claim Bonus if you don't claim for five years in a row. You can still get the deal even after installing the kit.

These changes keep eco-friendly driving affordable without lowering mandatory coverage levels.

Filing a Claim Without Delays

Quick deals begin as soon as an accident takes place.

• Tell the insurance company within 24 hours.

• Tell them that the car has an approved gas kit and ask for a claim reference number.

• Take pictures of the cylinder, the reducer, the high-pressure lines, and any burn marks.

• Keep CCTV clips or dash cam footage that shows how the accident happened.

• Please scan the gas kit bill and the RTO certificate and upload them to the insurance company's website.

• Record the names and numbers of witnesses because surveys may need third-party confirmation.

To ensure you don't miss the date, complete the initial claim form online before going to the class.

Due to training in gas system breakdowns, dedicated examiners now look over evidence within hours, cutting days off the approval process for car insurance in India. Clear, time-stamped information is still the best way to avoid disagreements and speed up the final payment.

Conclusion

Going from petrol to CNG or LPG saves money and the environment, but a small mistake in the forms can undo those benefits. The easiest way to protect your funds and follow the law is to get new CNG car insurance as soon as you add a cylinder. You can avoid five-figure repair bills tomorrow with a five-minute endorsement today.

Need to compare quotes quickly? Check out the best car insurance options on the market right now, and you can drive cleaner with peace of mind.

FAQs

Are cars that come with gas engines cheaper to cover than cars that have them added later?

Yes. Insurance companies say rates are lower for factory models because there is less risk associated with installation. This means that owners of retrofitted vehicles often pay less for LPG vehicle insurance in India.

If I move fuels, will it affect my No-Claim Bonus?

As long as you reveal the kit and renew your car insurance on time, your NCB remains intact. Only claims made, not fuel type, restart the bonus ladder.

Do petrol tanks need a different test to make sure they're safe?

Most insurance companies want proof that the cylinder has been tested for hydraulic pressure every three years. If you can't provide it, the claim could be delayed.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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