How CNG Impacts Your Car Insurance Premium

Posted on: Nov 7, 2022 | | Written by:

How CNG Impacts Your Car Insurance Premium

Published on November 02, 2022. EST READ TIME: 3 minutes

Fossil fuel-based vehicles leave behind a lot of carbon footprint. It does not come as a surprise that a lot of car buyers are looking for alternatives. Alternatives, where they can still enjoy driving without leaving behind as much carbon footprint. A CNG or Compressed Natural Gas car is one such alternative, that offers a lot of benefits. To ensure that you have a good ownership experience, you must opt for comprehensive car insurance for your CNG car besides the mandatory third-party car insurance.

CNG cars offer a lot of flexibility. You can either buy a car that has a CNG kit fitted from the factory, or you can opt to install a CNG kit onto your existing car. Irrespective of which mode you choose, you stand to cut down on your carbon footprint and bring down your ownership costs as well. Here is everything that you need to know about CNR Cars and insurance.

Advantages Of Buying A CNG Vehicle

Before we can get down to the car insurancepremium details of a CNG vehicle, here are the benefits of buying one in the first place. A CNG vehicle gives you the option to own a vehicle that is sustainable and eco-friendly to drive as well. Over the last few years, CNG vehicles have gained a lot of popularity. And it is due to the increasing pollution levels, climatic change, carbon emissions by vehicles, etc.

CNG vehicles are a great alternative to fossil fuel vehicles, as they are less expensive and are better in terms of economics as well. The fuel efficiency that you get with CNG cars is similar to petrol engine cars, however, you receive that efficiency at a third of the price of petrol. Also, the carbon footprint of CNG cars is quite low, making them one of the better vehicles for fuel efficiency.

How To Install CNG In A Car

Car manufacturers have introduced CNG cars to reduce the dependency on fossil fuel cars. However, there are different ways by which you can install CNG on your car. And more importantly, they impact your car insurance premium differently. Here are the details about both ways of getting CNG in your car.

1. Buying A New CNG Car

Should you opt to buy a car that has CNG fitted from the factory, it is the easier option of the two. As a car owner, there isn’t much onus on you. Once you buy the car, its registration is done as a vehicle that has CNG fitted from the factory. In such cases, the RTO is aware of your car being CNG, and the same reflects on the registration certificate of your car as well, along with a CNG seal.

As you buy a CNG car, you can opt for comprehensive car insurance for the car. This ensures that your insurer is already aware that your vehicle has CNG. And the renewals henceforth will be easier as well.

2. Install CNG In An Existing Car

If you already have a car and wish to avail yourself of the benefits of CNG, you can fit a CNG kit in your car. You can install the kit in either your petrol or diesel car. The only caveat is that your existing car insurance policy does not offer coverage for CNG cars. Thus, you must inform your insurance provider about the CNG kit being installed in your car.

Here is what you would need to do if you are getting a CNG kit installed in your car.

o Inform your RTO about fitting the CNG kit in your car, so that your RC book is updated with the correct information.

o Inform your insurance provider about the installation of the CNG kit. This will enable them to offer coverage for the newly installed CNG kit in your car. In most cases, the insurance provider will offer you a slightly higher coverage for CNG, which might increase your car insurance premium by a small margin.

To know more about it, Read - CNG Kit Installation – Things to Know!

CNG Kit’s Impact On Your Policy

The addition of a CNG kit can impact your policy premium. Here is how it impacts your policy.

● Change in Cover

As you install a CNG kit to your existing car, the coverage of your current policy might will not suffice anymore. That is primarily because the policies are usually for petrol or diesel engine cars. The moment you install the CNG kit, the maintenance of your car increases by a small margin. This increases the liability of your insurance provider. Thus, increasing the policy coverage of your policy. Should you decide to install a CNG kit for your car, you must inform the insurance provider, so that they can offer coverage for the CNG kit.

● Higher Premium

A CNG kit usually comes with a slightly higher maintenance cost. As discussed earlier, this increases your existing policy coverage, which in turn, increases your car insurance premium.

The IRDAI has set a standard price that car insurance providers can charge if you have a CNG-fitted car. The premium for third-party car insurance only is set at Rs. 60 for a financial year. Thus, for your externally fitted CNG kit, you would need to pay Rs. 60 additional as your car insurance premium.

A comprehensive car insurance policy, also offers coverage for the CNG kit, thereby increasing the policy premium by a small margin.

● Need For Endorsement

As you install a CNG kit to your vehicle, you would need an endorsement for the same. This is a process that needs to be carried out for any modification or changes to your car. Your insurance provider will provide an endorsement to your insurance policy about the changes in coverage. You must request your insurance provider for the endorsement. Failing to get the endorsement done might result in your claim being rejected.

● Car Insurance Premium Calculator

If you are considering installing a CNG kit in your car or planning to buy a car with CNG as a factory fit, you can take the help of a car insurance premium calculator. This will give you a better idea of how the CNG kit will impact your car insurance policy. The calculator will help you compare different policies and see how that impacts your premiums. You can also look at the coverage and add-ons on offer. You would need details such as car manufacturer, location, variant, etc. to calculate the policy premium.

Conclusion

The cost of running as well as the cost of ownership of fossil fuel cars constantly goes up. Any fluctuation in global fuel prices means that you will end up paying much more out of your pockets. Also, they do more damage to the environment. A CNG car will help you cut down on your operational costs and help you reduce your carbon footprint as well.

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

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