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Does my car insurance cover aftermarket parts?

Things to know...
  • Auto insurance policies will pay to replace parts and repair vehicles after a covered loss
  • Most insurance companies only cover manufacturer parts or stock parts used in the manufacturing process
  • When you modify your vehicle by installing aftermarket performance parts, your insurer might not pay for those parts
  • You should notify the insurer if you will be using aftermarket parts when doing repairs to see if it voids coverage
  • Many insurance companies will actually hire shops that use aftermarket parts to save money on claim repairs

When you’re repairing your vehicle or upgrading a component, you’ll have to choose between one of two different types of car parts. Repair shops will either use what’s referred to as OEM parts or aftermarket parts. One type is approved for use by the vehicle’s manufacturer and the other is a more affordable alternative.

It feels like it would make the most sense for a budget-conscious to choose the cheapest option, however, putting cost first could affect how your vehicle operates in the coming years. Using low-quality parts could reduce your car’s value and its lifespan. Another risk of using the wrong parts is that you could face a claims denial when you file an insurance claim.

What are OEM parts?

adobestock_86115954-1600x1600OEM stands for Original Equipment Manufacturer. These are the parts that the vehicle manufacturer has used or has approved for use on their models. If you were to use the term genuine when describing vehicle components and parts, you would be referring to OEM options.

If your car is under warranty, it’s important that you checked to see whether or not you’re required to use OEM parts when paying for repairs.

What are aftermarket parts?

Aftermarket parts are a lot more affordable than the OEM counterparts. This is one of the main reasons why 80% of shops today use aftermarket parts when doing repairs to keep their charges reasonable and to stay competitive with other repair shops. If the part is produced by any Source other than the vehicle’s manufacturer, it meets the definition of an aftermarket part.

On average, aftermarket parts will cost about 60 percent less than the same part that was produced by the original equipment manufacturer.

That’s huge savings when you factor in how much labor costs. Amazingly enough, the aftermarket options are generally just as good if not better than the options when you’re going with OEM alternatives.

What are the benefits of choosing aftermarket parts?

AdobeStock_55566404-1600x1600Price isn’t the only reason why most car owners will select an aftermarket part over a genuine one. Since there are more sources, there’s more variety available to choose from. Also, the parts are often more easily accessible, especially when you own an older or rare vehicle.

These are just a few of the main reasons why even reputable mechanics choose aftermarket. Even though it is possible to find high-quality parts that outperform the ones that the car maker makes, so many different part companies that distinguishing a good company from a bad company can be overwhelming. The saying “You get what you pay”, for definitely applies here.

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Will your claim be covered if you have aftermarket parts?

If you decided to take your vehicle to a shop in the past that has clearly notified you that they use quality aftermarket parts, you should call your insurance company right away to see if this will cause you any issues.

Some insurers required their policyholders to list aftermarket parts if they are performance parts. If the parts were specifically to replace genuine components that have failed, they may not need to be listed.

Some companies don’t look that closely at a claim to deny payments, however, the if it’s a large claim there’s no telling whether or not the company will exercise its right to turn a claim down if you have parts installed in your vehicle that is in violation of your contract. Violating your contract is the last thing that you want to do if you ever have any type of loss.

Check to See If Your Company Uses Aftermarket Parts

Dollarphotoclub_82337319-1600x1600If your insurance company is arranging your repairs for you and they have requested that the shop uses aftermarket parts, makes no sense for a claim to be denied for not using genuine parts in the past. If you run into this issue, contact the Department of Insurance in your state right away.

When you invest a huge sum of money into repairing your vehicle with genuine parts, it can be disconcerting to learn that your insurer is one of the insurers that will only pay for aftermarket parts.

After all, you shouldn’t have to pay 60 percent more for your parts just to have to accept the fact that your insurer is going to use parts from a different source no matter what.

Many people don’t even focus on things like vehicle parts when they’re comparing auto insurers. There’s so much focus put on pricing and also on the availability of coverage options, that nobody ever asks how the insurer will pay when there’s a claim and what they will pay for. Ask your agent these crucial questions before you ever submit an application.

Do you have to get repairs done at the insurer’s shop?

One way of the insurance companies keep repair cost low is by working closely with repair shops. The company will get a discounted labor rate when they send their clients to a specific shop.

Under the contract, the insurer will already know what type of parts are being used.

If you’re being sent to a repair facility, see if you have the right to go to a different shop that you trust. The company cannot require that you have repairs done where they want you to go. They can encourage it but if you ask to go elsewhere they can’t just deny your claim.

Always List Performance Parts

When you add something to your property that modifies its value in a positive way, you need to notify your insurer. Aftermarket parts can also be performance parts. If you’ve installed performance parts, ask your agent if they are allowed and if they can be scheduled for extra coverage.

You may need a specialty policy if you invest in several different performance parts. Aftermarket parts can be a touchy subject. They are frowned upon when you pay for them, the insurance company wants to pay for them it’s considered a standard practice.

This is why you need to protect yourself by doing research before you buy coverage. Get quotes for auto insurance online and once you compare them, call the insurer to find out their practices.

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