More people in India are choosing CNG cars to save money on fuel, which is a smart move as of June 2025! But after installing that shiny new kit, many forget the two key things you must do for your CNG car insurance.
This small oversight can lead to huge problems, like your insurance company refusing to pay for damages after an accident. Don’t worry, though. I’ll show you the two simple actions you must take to keep your car properly covered and legally on the road.
The First 2 Things You Must Do For Your CNG Car Insurance Immediately After Installation
Before you start counting the money you’ll save on fuel, you need to handle the legal paperwork for your modified car insurance. These two steps go hand-in-hand; you can’t finish one without the other. Here’s exactly what you need to do.
1: Get the CNG Kit Endorsed on Your Vehicle’s Registration Certificate (RC)
This is the first thing you have to do. The law in India (Motor Vehicles Act, 1988) says you must officially report this change to your car. Your insurance provider will not update your car insurance policy until you show them a new Registration Certificate (RC) from the Regional Transport Office (RTO) that lists the CNG kit.
Here is how you get it done:
- Go to the same RTO where you first registered your car.
- Fill out a form to report the vehicle modification.
- You must submit a few documents with the form. These include:
- Your original RC book.
- The purchase receipt (invoice) for your government-approved CNG kit.
- An installation certificate from the authorized shop that fitted the kit.
- A copy of your active car insurance policy.
- Your identity and address proof, like an Aadhaar card.
- After you pay the required fees, an officer will inspect your car. Once they approve it, they will give you an updated RC that shows your car now uses CNG as a fuel type.
2: Inform Your Insurer to Endorse the CNG Kit on Your Car Insurance Policy
Once your RC is updated, your next immediate step is to talk to your insurance company. If you skip this and have an accident, your insurer can reject your claim because you changed the car without telling them. Your old policy only covered a petrol car, not the valuable CNG kit you just added.
Follow this simple process:
- Contact your insurance provider right after you get the updated RC. Do not wait for your car insurance renewal date.
- Send them a copy of your new RC and the invoice for the CNG kit.
- The company will issue a “CNG endorsement” for your policy. This is an official note that adds the kit to your insurance coverage.
- Your CNG vehicle insurance costs will increase slightly, and you will need to pay this extra amount . This payment makes sure your entire car, including the new kit, is properly protected.
Source: The information presented here is based on guidelines from Indian regulatory bodies and insurance providers like HDFC Ergo, Acko, and Zurich Kotak General Insurance, as reflected in the cited sources.
Factory-Fitted vs. Aftermarket CNG Kits: How the Insurance Process Differs?
The steps for your CNG car insurance change based on whether your car came with the kit from the factory or you added it later. Here’s a look at both situations.
Factory-Fitted CNG Cars
When you buy a brand-new car with a CNG kit already installed by the manufacturer, like from Maruti or Tata, the process is very simple for you.
The car dealership handles all the initial paperwork. Your new Registration Certificate (RC) and the first insurance policy you get will already list CNG as a fuel type. The car’s total price automatically includes the kit’s cost, so your insurance coverage is correct from the very first day.
Your only job is to double-check your policy documents. Make sure the “Fuel Type” section correctly says “Petrol/CNG.” A big benefit here is that this setup comes with a full warranty from the car company, and the kit has been tested for safety.
Aftermarket (Retro-fitted) CNG Kits
If you add a CNG kit to your existing petrol car from an outside shop, you are responsible for all the paperwork. You must complete the two steps we discussed earlier: updating your RC at the RTO and then informing your insurance provider.
This process is very important because the quality of an aftermarket installation can vary. Your insurer needs official documents to know that an authorized professional fitted the kit safely. Also, adding an aftermarket kit usually voids your car’s original manufacturer warranty, which makes having the correct insurance for your CNG vehicle even more necessary.
Source: The information presented here is based on guidelines from automotive and insurance experts at sources like Acko, HDFC Ergo, and 91Wheels, as reflected in the cited sources.
How a CNG Kit Impacts Your Premium and IDV? A Detailed Breakdown
Adding a CNG kit to your car will change how much you pay for insurance. It’s a common question, and understanding how CNG car insurance rates are calculated helps you see why the cost goes up.
The Premium Increase Explained
Your total insurance premium has two main parts, and the CNG kit affects both of them.
First, there’s the Third-Party Liability cover. This is the insurance that pays for damages to another person or vehicle in an accident. The Insurance Regulatory and Development Authority of India (IRDAI) requires a small, fixed increase for CNG cars, which is currently around ₹60 (this amount can change).
The bigger change to your premium comes from the Own Damage part of your policy. This is the part that covers repairs to your own car. Since you have added a valuable CNG kit, your car is now worth more. The insurance premium goes up to cover this increased value.
Why Your Insured Declared Value (IDV) Must Be Updated
This is where many people get confused, but it’s very simple. The Insured Declared Value (IDV) is the maximum amount your insurance company will pay you if your car is stolen or damaged so badly that it’s not worth repairing (a total loss).
When you install a CNG kit, you must add its cost to your car’s IDV. This update is a key part of managing your modified car insurance.
For example, let’s say your car’s IDV was ₹4,00,000. You then install a CNG kit that costs ₹50,000. Your new IDV should be updated to ₹4,50,000.
Updating the IDV makes sure that in a worst-case scenario, you get paid back for the full value of your car, including the expensive kit you added. If you fail to update it, the insurer would only pay you the old IDV of ₹4,00,000, and you would lose the money you spent on the kit.
Source: This information is based on the general practices of Indian insurance providers like TATA AIG, Acko, and Shriram General Insurance, as outlined in the cited sources.
Optimizing Your Coverage for a CNG Car
Getting the paperwork right is only half the story. You also want to pick the right type of insurance plan to get the best protection for your money. Making smart choices here is a key part of handling your CNG vehicle insurance.
Why Full Coverage is the Best Choice
By law, you only need Third-Party insurance. But this basic plan only pays for damages to another person’s car or property. It offers zero payment for repairs to your own car or your expensive CNG kit.
Since you’ve spent money to add a CNG kit, you’ve increased your car’s value. The only practical choice is a policy that covers damages to your own vehicle in an accident, in addition to third-party liabilities. This way, both you and your investment are protected.
Recommended Add-On Covers
You can make your insurance even better by adding some extra features. Think of them as small power-ups for your policy.
Zero Depreciation Cover: When you claim for a damaged part, insurers usually deduct some money for its age (depreciation). This add-on stops that deduction, meaning you get the full cost of new parts for your car and its CNG system.
Engine Protection Cover: This is a useful extra for any car. It gives you an added layer of safety by covering damages to the engine from things like water entering it or oil leakage, which a standard policy might not cover.
Roadside Assistance: If your car breaks down, has a flat tire, or runs out of fuel, this add-on provides 24/7 help. It gives you great peace of mind, especially when you are traveling far from home.
Source: This information on policy types and add-ons is based on general insurance advice from providers like Bajaj Allianz and guides like Best Gaddi.
Frequently Asked Questions
What happens if I make a claim without informing my insurer about the CNG kit?
Your claim will almost certainly be rejected. Insurers consider this a material modification, and failure to disclose it can void your policy, leaving you to pay for all damages out of pocket.
Why does my insurance premium increase for a CNG car?
The premium increases because the value of the CNG kit is added to your car’s Insured Declared Value (IDV), raising the coverage amount. Insurers also factor in slightly higher maintenance costs and perceived risk.
Which type of insurance policy is best for a CNG car?
A Comprehensive Insurance policy is strongly recommended. It covers damage to your own vehicle, including the CNG kit, along with third-party liabilities. Basic third-party insurance will not protect your car.
Do I need a separate insurance policy for the CNG kit?
No, you don’t need a separate policy. The correct procedure is to get your existing car insurance policy endorsed to include the CNG kit, which officially adds it to your coverage.
Will installing a CNG kit affect my No-Claim Bonus (NCB)?
Simply installing the kit and updating your policy does not affect your accumulated NCB. However, some insurers’ policies may vary, so it is wise to confirm with your provider when you request the endorsement.
Final Thought
To sum it all up, remember the two most important steps for your CNG car. First, you must update your car’s Registration Certificate (RC) at the RTO to show the new kit has been added. After that, you must give a copy of the updated RC to your insurance provider so they can add the kit to your policy.
Viewing these actions as an investment in your financial safety is the best approach. When you complete these steps, you get genuine peace of mind. You can then drive your car and enjoy the fuel savings without worrying about any hidden risks or claim rejections.