If you ever plan to get a CNG kit for your car then here is what you need to know. Learn how having a CNG kit can directly or indirectly impact your premiums.
Both petrol and diesel are expensive. Both have their pros and cons. This just makes it tough for you to select a car with the better variant, isn’t it?
If they are compared to CNG, you’d realize there is a stark difference between their pricing. CNG (Compressed Natural Gas) wins hands-down any day!
If you drive regularly, you’d find CNG to be more economical and environment-friendly in the long run.
However, it does impact your car insurance premiums. How and why?
Let’s get to the heart of the matter!
What you didn’t know about CNG.
First let’s talk about its advantages:
Better efficiency and mileage
After fitting the CNG kit, you’d notice a vast improvement in your car’s mileage. Less fuel needed to cover the same distance. Moreover, CNG costs about half or more-than-half of Petrol. Saving about thousand rupees monthly in fuel costs isn’t bad after all. Hands down, CNG is a much more efficient.
Want safety and value for money? CNG promises to be a safer alternative to petrol and diesel. It’s not flammable and emits less Carbon Dioxide making it eco-friendly.
Effective cost savings
The initial cost is high, which is actually a drawback. However, the good news is that it can be quickly recovered in few months.
Moving on to its disadvantages:
Takes up excessive boot space
A CNG kit could occupy up to half of your boot. This depends on the size of your car. If long trips with lots of luggage is your thing, steer away from CNG kits.
Not readily available
All fuel stations don’t offer CNG. It means you’d have to stand in long ques along with rickshaw drivers when you have to refill. In fact, it could take up to 15 minutes to refill.
Convertibility and licensing
Not all cars are compatible with the CNG fuel system. You need government approvals before getting the kit installed. A line of formalities include getting the Registration Certificate (RC) branded with a ‘fuel change’ seal. Post that you can start using the CNG kit.
How does it impact your car insurance policy?
Existing coverage won’t suffice
If you plan to install a CNG system in your car, the work doesn’t end there.
You may think that the existing insurance cover would be adequate. But the truth is that it won’t be enough. There is a higher maintenance and damage costs associated with CNG kits.
This with the installation of the kit, the coverage along with the premiums too shoots up.
Pay higher premiums
You need to notify the insurer who will charge an additional premium.
CNG cars are considered to be riskier by insurance companies. You would have to pay an additional charge of Rs. 60 towards liability cover for your CNG car. This is as per the Indian Motor Tariff, which determines charges for car insurance premiums.
The premium is typically 4 - 5% of the CNG kit value. In fact, the premium also depends on the age and make of your car. It could increase up to 10%.
Some insurers may ask you to have the CNG kit registered on the vehicle’s registration certificate.
Endorsement from the insurer on the car’s policy
Your insurance contract usually has a clause on CNG conversion. Fitting a CNG kit acts like a major alteration to the car.
It has to be added to your insurance policy. Its malfunction get affect the entire car and thus treated as a consequential damage. And consequential damages is generally excluded in the list of exclusions among insurers.
That’s why to insure the kit, you need an endorsement from your insurance company on your car’s policy. If you fail to get it done, your whole policy will turn null and void.
If you ignore insuring the CNG kit, then be ready to let go of your insurance benefits for your car!
Before installing the kit in your car, always check with your insurer. Make your decision only after you get a confirmation from them. :)