A professional finishes the CNG installation and shows you the cylinder tucked under the boot floor. Then comes the line every owner hears. No need to tell the car insurance people.
This is bad advice, and it can cause serious problems later.
Insurance for CNG vehicles costs a little more than a petrol policy, though the extra charge is far smaller than most owners fear. If you stay quiet and do not inform the insurance company just to save some money, this can cost you the whole claim if the car goes through any damage. Here is what it actually costs to do this the right way, which two places you need to inform, and what happens if you keep it a secret.
What Does Car Insurance for CNG Vehicles Cost Extra?
There are two extra costs, and both are set rates that you cannot change.
Liability cover carries a flat 60 rupees a year for a private car running a bi-fuel kit. This figure is set alongside the other government-controlled third-party rates.
However, own damage insurance works a little differently. The CNG equipment is insured as a separate item, and is priced at four rupees for every hundred rupees of kit value.
Adding these two costs together results in a very small increase in your car insurance bill, about the price of a weekend lunch.
Factory-fitted cars are treated the same way, incidentally. Gas equipment supplied by the maker already sits on the registration papers, so the only job left is checking that the policy schedule mentions it too.
Two Offices That Need To Be Informed
One of the offices is your Regional Transport Office (RTO), which needs the fuel type to be updated on your registration certificate, from petrol to CNG. This usually needs to be done within days of the kit being installed.
The approval completely depends on the hardware. Kits must be type-approved by the Automotive Research Association of India (ARAI), the government body that certifies vehicle equipment, and fitted at a retrofitment centre the RTO recognises.
Filing is quick when the folder is ready. Approved centres issue an installation certificate, and the RTO wants that alongside the existing registration papers and proof of the kit’s purchase.
Your insurer needs a separate endorsement, which is a written change to the policy recording the kit and the value you declare for it.
Owners routinely complete one and assume the other follows along. RTO paperwork never reaches your insurer, and a policy endorsement never updates your registration certificate. You need to take care of both tasks separately, since neither process automatically updates the other.
What Happens to a Claim When You Do Not Disclose It
Nobody inspects your boot on an ordinary Tuesday, but when the car is seriously damaged, a surveyor can.
Repair bills will show the truth. When a surveyor sees parts like gas lines and a cylinder on a workshop bill, they will know the car has a CNG kit. This shows that the vehicle does not match the one described in your car insurance policy.
Paperwork travels faster than owners expect, particularly under cashless car insurance, where the garage bills the insurer directly and provides a detailed list of every part and repair performed.
If you read the refusal letter afterwards, the reason is rarely the accident itself. Insurers decline because the car they agreed to cover and the car brought in for repair are different.
It might be surprising, but the law treats injury claims differently. If you are involved in an accident, your car insurance company must still compensate the injured person. However, if you didn’t disclose your CNG kit, the insurer can then hold you responsible and demand that you pay them back for the costs they covered.
Is the Kit Itself Even Covered?
If you have declared it to the insurer, the equipment falls under your insurance policy with a value against it, and damage to it is claimable like any other part.
If it is undeclared, the insurer simply doesn’t know the kit exists and is thus not covered. If it burns, or you lose it in a theft, or crush it in a car crash, you have no right to make a claim against it.
The location of the kit makes this even worse. Most kits are kept in the boot, which is the part of the car most likely to be damaged in a rear-end collision. Replacing a CNG cylinder is very expensive, so if it gets damaged, it will add a high cost to your repair bill.
Where Declaring Still Leaves You Exposed
Just because you’ve told your insurer about your CNG kit doesn’t mean it’s officially safe. You still need to maintain it. For example, cylinders have expiration dates, hoses get old, and leaks from worn-out parts are considered maintenance issues, not accidents.
Wear and tear also stay excluded, as they always have been. Kit components also come with depreciation when they are replaced, so a settled claim rarely returns the full price of the new parts.
Fitting done outside an approved centre can also be questioned even after you declare it, since the policy endorsement only confirms your ownership of the equipment rather than certifying the quality of the installation.
Ultimately, declaring your CNG kit makes your car insurance simple, and you just need to pay a small extra fee. This also gives you peace of mind knowing that your insurer cannot deny a claim just because you have a CNG system in your car.
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