Auto insurers pay billions of dollars each year to repair policyholders’ vehicles when they are involved in accidents. These repair costs have a direct impact on the cost of insurance coverage, so insurers are interested in identifying ways to ensure the repair process is as cost-effective and efficient as possible. Aftermarket crash parts – including exterior sheet metal and plastic parts such as fenders, hoods, and door panels – are frequently much less expensive than original equipment manufacturer parts, with no difference in the safety of the repaired vehicle, making their use in repairs beneficial to consumers. Over the years there have been many attempts by those who profit from the use of OEM repair parts to limit the availability and use of less expensive aftermarket parts when cars are repaired following accidents.
A significant number of states require that the use of aftermarket parts be disclosed to consumers prior to a repair, and many states require that any aftermarket parts be “of like kind and quality” to OEM parts. The National Association of Insurance Commissioners has adopted a model regulation containing such requirements.
In 2010, NAMIC commissioned a public policy paper that examined the implications of removing aftermarket parts from the competitive marketplace. It found that if aftermarket parts could no longer be used for insured auto repairs, annual auto insurance premiums would increase on average by $109 per vehicle.