Auto Insurance: Oem Parts Not Covered

After a car accident, your insurance company will cover the cost of replacement parts, but the type of parts covered—original equipment manufacturer (OEM), aftermarket, or recycled parts—will depend on your policy. While some policies may cover OEM parts, others might not, and you may be responsible for repair costs beyond your deductible. Aftermarket parts are made by third-party manufacturers and are usually cheaper than OEM parts, which are produced by the original manufacturer. If your insurance policy does not cover OEM parts, you can either switch to an insurer that does or pay the difference between the cost of OEM and aftermarket parts.

Aftermarket parts are often used to keep costs down

Aftermarket parts are also more readily available than OEM parts and can be sourced from any auto shop, gas station, or mechanic shop. On the other hand, OEM parts can only be sourced from original manufacturers or their authorised dealerships, which limits the options for sourcing parts. This means that it may take longer to service a vehicle when there is a shortage of parts, as they will have to be ordered.

In addition, some aftermarket parts are of equal or greater quality than OEM parts. This is because aftermarket manufacturers reverse-engineer OEM parts, allowing them to identify their strengths and weaknesses. However, the quality of aftermarket parts can vary greatly, so there is a higher level of uncertainty regarding their quality.

Insurance companies often opt for aftermarket parts to save money, and this is reflected in the low cost of policy premiums. However, if you prefer OEM parts, you may be able to come to an agreement with your insurance provider or pay the difference between the cost of OEM and aftermarket parts.

OEM parts may not be available for older vehicles

When it comes to older vehicles, the availability of original equipment manufacturer (OEM) parts is a significant concern. As a vehicle ages, the likelihood of finding OEM parts decreases, and this can put drivers in a challenging situation. Here are some key points to consider regarding the availability of OEM parts for older vehicles:

The Age Factor: According to industry sources, OEM parts become harder to find once a car model reaches the five-year mark. This scarcity can pose challenges for repairs and maintenance, as mechanics may not have access to the full range of OEM parts needed to keep older vehicles running.

Discontinued Models and Limited Stock: For older vehicles, manufacturers may discontinue certain parts or even pull out of the market entirely. This can lead to difficulties in sourcing OEM parts, as they may no longer be readily available from dealerships or distributors. In some cases, parts may need to be ordered from overseas or sourced through alternative channels like eBay or junkyards, which can be time-consuming and unreliable.

Compatibility Concerns: OEM parts offer the most compatibility with your vehicle compared to aftermarket parts. However, as diagnostic equipment and technology advance, older vehicles may face challenges in terms of compatibility. Some repair shops may no longer have the necessary technology to accurately diagnose and repair issues with older car models.

Custom and Remanufactured Parts: For antique, vintage, or discontinued models, custom parts can be created to match the specific requirements of the vehicle. While this option offers a high level of quality, it also comes with a higher price tag. Certain manufacturers also offer remanufacturing services, where they build components for older model engines, transmission systems, steering racks, and safety components. However, these services are generally available for select systems and may not cover all aspects of the vehicle.

Aftermarket Parts as an Alternative: When OEM parts are no longer available for older vehicles, aftermarket parts may be the only option. Aftermarket parts are produced by third-party manufacturers and can vary in quality. While some people believe that aftermarket parts are inferior to OEM, others argue that they can be of equal or better quality, especially if they have certifications from organizations like the Certified Automotive Parts Association (CAPA).

In summary, the availability of OEM parts for older vehicles is a valid concern. As vehicles age, the supply of OEM parts diminishes, and repairs can become more challenging. In such cases, drivers may need to explore alternative options, such as custom or remanufactured parts, or consider using aftermarket parts that meet quality standards.

Insurance companies decide on parts when writing policies

Your policy may cover original equipment manufacturer (OEM) parts, which come from the manufacturer that produced your car. If you need a new headlamp for your Toyota Corolla, for example, an OEM part would come directly from Toyota rather than a third-party aftermarket manufacturer. While OEM parts may or may not be better in quality, they will be at least equal in quality to the parts that were already on your vehicle. However, the use of OEM parts is not always guaranteed unless you purchased a specific OEM endorsement.

Another option covered by some policies is aftermarket parts, which are made by third-party manufacturers. These parts may vary in quality, and some are even better than OEM parts. Insurance companies often opt for aftermarket parts to save money, as they can return a vehicle to pre-loss condition at a lower cost, which helps keep premiums low for all policyholders.

In some cases, recycled parts may also be covered by your policy. These are parts taken from other vehicles and can be ideal if you have an older vehicle with hard-to-find parts, or if you're looking to save money.

It's worth noting that not all states have the same regulations regarding the use of OEM and aftermarket parts. Some states require insurers to disclose the use of aftermarket parts in repair estimates, while others mandate that aftermarket parts must be of like kind and quality as OEM parts. Ultimately, it is important to carefully review your insurance policy to understand which types of parts are covered and make an informed decision about whether additional coverage is needed to ensure the use of OEM parts.

OEM parts are brand new and created by the original manufacturer

When it comes to auto insurance and repairs, it's important to understand the difference between OEM and aftermarket parts. Original Equipment Manufacturer (OEM) parts are brand new and created by the original manufacturer of your vehicle. They are specific to your car's make and model and ensure the highest quality and safety standards. On the other hand, aftermarket parts are generic versions manufactured by third-party companies. While some aftermarket parts are of good quality, they may not always meet the same standards as OEM parts.

When your car needs repairs, the type of replacement parts covered by your auto insurance policy becomes crucial. Most insurance companies include the use of aftermarket parts in their repair estimates as they are more cost-effective, helping to keep premiums lower for all policyholders. However, this may not always be ideal for vehicle owners who prefer OEM parts.

In some cases, insurance policies may cover OEM parts, but it's not always guaranteed. To ensure you get OEM parts for your repairs, you may need to purchase additional coverage or an OEM endorsement. This guarantees that, in the event of a covered loss, OEM parts will be used if available. Without this specific coverage, your insurance company is unlikely to cover the cost of OEM parts.

It's important to carefully review your insurance policy to understand what type of parts are covered. If OEM parts are important to you, consider switching to an insurer that offers this coverage. Additionally, be aware that for older vehicles or discontinued models, OEM parts may no longer be available, and aftermarket or used parts may be the only option.

In summary, while auto insurance policies may not always cover OEM parts, it is possible to obtain this coverage by making informed choices and, if necessary, paying an additional fee. As a vehicle owner, it's essential to prioritize quality and safety by insisting on OEM parts whenever possible.

Aftermarket parts are sometimes regulated by state laws

The NAIC model regulation defines "aftermarket parts" as sheet metal or plastic parts that generally constitute the exterior of a motor vehicle, including inner and outer panels. This regulation requires that an aftermarket part manufactured after the effective date of the regulation carry sufficient permanent identification to identify its manufacturer. The identification must be accessible to the extent possible after installation.

The model regulation also prohibits an insurer from requiring the use of aftermarket parts in a vehicle repair unless the aftermarket part is at least equal in kind and quality to the original part in terms of fit, quality, and performance. Additionally, insurers specifying the use of aftermarket parts must consider the cost of any modifications that may become necessary when making the repair.

Under the model regulation, the repair estimate must clearly identify all aftermarket parts to be installed on the vehicle. The insurer must disclose to the claimant in writing, either on the repair estimate or on a separate document attached to it, that aftermarket parts will be used and that they are required to be at least equal in kind and quality to the original manufacturer parts they are replacing.

In addition to the NAIC model regulation, some states have enacted their own laws and regulations regarding the use of aftermarket parts in vehicle repairs. For example, Texas law states that insurance companies cannot limit coverage by specifying the supplier, type, brand, or condition of replacement parts. Insurance companies must also issue notices to policyholders stating that the claimant has the right to dictate which parts a mechanic uses for repairs. However, the insurance company does not have to pay more than a reasonable amount for parts.

Other states, such as California and Florida, have laws requiring insurers to disclose the use of aftermarket parts in repair estimates and provide written notification to the consumer that aftermarket parts will be used. Some states also require the manufacturer of the aftermarket part to be identified and for the parts to be of "like kind and quality" to OEM parts.

Overall, the regulation of aftermarket parts in vehicle repairs varies by state, but there are some commonalities between the different laws and regulations. The goal of these regulations is to protect consumers by ensuring that aftermarket parts are safe and of comparable quality to OEM parts.

Frequently asked questions