Repair shops can use a variety of parts to get your vehicle back on the road. While most car owners might prefer parts produced by the original manufacturer, many standard auto insurance policies do not cover them. However, many insurers offer optional coverages that pay for the original parts you might favor.
What Are Original Equipment Manufacturer (OEM) Parts?
Automobile manufacturers produce OEM parts for their vehicles. For example, Ford Motor Company produces replacement parts through several brands, including Ford Parts, Ford Motorcraft, and Ford Accessories. Typically, OEM parts are exact replicas of the parts used when the manufacturer assembled your car, so they fit perfectly. You can also buy used and aftermarket parts. Third-party companies, not an automobile’s original manufacturer, produce aftermarket parts. These parts are easier to produce at a high volume, but oftentimes they are manufactured to fit several makes and models of vehicles, not a single automobile. Let’s say your Ford needs a new ignition switch. If you take it to the Ford dealership for repair, they will replace it with a new OEM part. But if Joe’s Garage handles the repair, they may replace the part with one manufactured by ABC Auto Parts.
Does Insurance Cover OEM Parts?
Insurance companies may or may not pay for OEM parts. State insurance codes vary, but some require insurers to cover OEM parts under certain circumstances. For instance, Minnesota law requires carriers to cover OEM parts, unless you agree to make repairs with aftermarket parts. However, this stipulation in Minnesota’s insurance code does not apply to vehicles you purchase used. California’s insurance code requires repair shops to identify replacement parts as new, used, OEM, non-OEM, rebuilt, or reconditioned on all repair invoices. California law also stipulates that non-OEM parts must meet several standards related to fit, performance, quality, and safety. To find out if your insurance policy will cover OEM parts, review its “Insuring Agreement” section. If your insurer will not pay for OEM parts, they may offer the option for you to pay the difference between non-OEM and OEM costs.
How To Get OEM Parts
When you file a car insurance claim, the carrier is only responsible for restoring your vehicle to its pre-loss condition. That’s why, when allowed by law, insurers often write repair estimates that include non-OEM parts, which cost significantly less than OEM components. But there are ways to ensure that repairs are made to your vehicle using OEM parts.
Know Your Rights
Research your state’s insurance code to learn more about OEM parts requirements. For example, New Hampshire law requires insurance companies to pay for OEM parts for vehicles that are no more than two years old, with no more than 30,000 miles on the odometer. This law also applies to leased vehicles, when using non-OEM parts will diminish the car’s value. However, the insurance codes in some states do not dictate OEM requirements. For instance, in North Carolina, repairs can be done on your automobile with aftermarket parts without your approval, but carriers are required to identify aftermarket parts on repair estimates and repair invoices.
Add an OEM Endorsement or Rider
Some auto insurance companies offer OEM parts endorsements or riders, which you can add to your policy for an additional cost. If you’re shopping for car insurance, and OEM parts are important to you, look for providers that offer OEM parts coverage.
Pay the Difference
If an insurance company isn’t required to repair your car with OEM parts, chances are it won’t. But, if you receive a repair estimate that includes non-OEM parts, you can usually pay the difference to get the OEM parts you want.
Which Parts Do Body Shops Prefer?
Mechanics like OEM parts because they fit perfectly without the need for any adjustments. For example, the mounting bracket for an OEM radiator would perfectly align with the mounting screw holes, just like the original part. Since OEM parts usually cost more than aftermarket parts, repair shops can make a higher profit with a higher markup. Typically, repair shops can make adequate repairs using non-OEM parts. Oftentimes, aftermarket parts perform just as well as OEM parts. However, aftermarket parts sometimes require adjustments that OEM parts don’t. For instance, the mounting bracket of an aftermarket radiator might not perfectly align with the mounting screw holes. The quality of aftermarket parts ultimately comes down to the manufacturer.
Should I Insist on OEM Parts?
In some cases, non-OEM parts perform just as well as OEM parts. But some car owners insist on making all repairs with OEM parts. If you typically only keep a new vehicle for a couple of years, maintaining original parts may offer a better trade-in value. Bear in mind that, one way or another, insisting on OEM parts will cost more. You often have the option to add an OEM parts endorsement to your car insurance policy, but that will increase your premium. If you don’t have an OEM parts endorsement, and your insurer will only pay for non-OEM parts, you’ll have to pay the difference out of pocket. Non-OEM parts can differ from OEM components in many ways. For instance, the screw holes in an aftermarket fender panel may be larger and more difficult to align than an OEM panel. Or an aftermarket radiator may have fewer cooling tubes than an OEM radiator. Typically, new car dealerships are the best source for OEM parts. Most major dealerships also have a service department, with a parts counter. OEM parts are also an income stream for car manufacturers. Oftentimes, a dealer’s parts and service revenue can help balance the books when new car sales drop.
title: “What Types Of Car Parts Are Used In Insurance Claims " ShowToc: true date: “2022-12-16” author: “Augusta Dameron”
What Kinds of Car Parts are Primarily Paid for by Insurance Companies?
The answer to the question can vary depending on which insurance company you are insured by, what type of coverage you’ve purchased, and how your policy is set up. Take a look at the different kinds of car parts available and why body shops and insurance companies like them or not.
OEM Parts
Original equipment manufacturer (OEM) parts are what they sound like: They are original pieces of equipment made by your car’s manufacturer. OEM parts are brand-new, never used before parts that go directly to your vehicle. They are often more expensive than other options and can sometimes take longer to receive. They must be ordered from a single manufacturer; lots of body shops do not keep tons of OEM parts on hand because of this cost and will have to order the parts before making repairs.
What the Body Shop Thinks About OEM Parts
You might think that the need to custom order parts for each repair would mean shops would hate OEM parts—but in most cases, you’d be wrong. Body shop repair people love OEM parts because they fit perfectly without the need for any adjustments—they’re like the color by number portraits of the auto shop world. Shops also make a more significant profit on repairs made using OEM parts as compared to repairs made using other types of parts. Easier repairs, plus more money left in their pocket, make OEM parts a no-brainer for body shops to sell. Insurance companies, on the other hand, are not huge fans, for obvious reasons: The job of insurance companies is to keep their costs as low as possible. Insurance companies may only pay for the cost of OEM parts if no other parts are available, or if you have requested an OEM endorsement (which you pay extra for) on your policy. Insurance companies are looking to repair your vehicle and get you back on the road, which can usually be done just as well by using other types of car parts rather than OEM parts. It is not only the job of the insurance claim adjuster to make your vehicle whole again, but also to do so for the smallest amount of money.
Aftermarket Parts
Aftermarket parts are parts made by a company other than your car’s manufacturer. The parts are still new, and they have never been used on another vehicle—they are just not purchased directly from your car manufacturer. Think of aftermarket parts as the off-brand version of your favorite foods—they’re available for much cheaper but usually still work just as well.
What the Body Shops Think About Aftermarket Parts
Good body shops can handle repairs made using aftermarket parts just as well as repairs made using OEM parts. The repair of your vehicle will look the same as it did before having any damage. However, sometimes adjustments may need to be made by the body shop repair people to get the parts to fit just right. It can be a hassle, but a good shop can still get the job done. Insurance companies, on the other hand, don’t have to get their hands dirty, making repairs and adjusting parts to fit. Insurance companies prefer aftermarket parts to OEM parts because they are cheaper. Lowering the cost of the claim is an essential part of an insurance claim adjuster’s job. If aftermarket parts were never used, the high cost of OEM parts would send insurance rates soaring. Most of us feel we already pay more than enough for our insurance coverage, so aftermarket parts are often a benefit for consumers. Standard insurance coverage typically covers aftermarket parts and not OEM parts.
Used Parts
Used parts are just that, used. They come from the junkyard. Lots of vehicles get discarded every day for various reasons. Anything from a car accident to engine trouble to age can all become a way for a car to make it into the junkyard. Most of the time, lots of parts are still good on a discarded vehicle. Those parts can be resold individually to repair other vehicles. The great thing about used parts is they are usually OEM parts that have been used.
What the Body Shop and Insurance Company Think About Used Parts
Both body shops and insurance companies like to use used parts in repairs. They fit great and can be made to look and work as well as new. Used parts are cheaper than OEM parts so that insurance companies can save some money. However, sometimes the parts needed can be hard to find, so they are not always an option. The ability to recycle something sitting in the junkyard is also a perk of used parts. More than likely, your vehicle will be repaired with used or aftermarket parts in an insurance claim. It is very common among most insurance carriers. If used or aftermarket parts are a problem for you, request OEM parts ahead of an auto claim—know that you will have to pay extra. Talk to your insurance agent about an OEM parts endorsement. If one is not available, check around for different insurance companies to see if it is a possibility for your vehicle.
