Will your auto insurance company fix your car ‘good as new’?
Richard J. Koreto
A car accident crushes your front bumper, your headlights and even your radiator. You’ll want the mechanic to make your car looks and runs as good as new.
But will your car receive the same kind of parts it had when it rolled off the assembly line? Or will you have to make do with non-factory parts? Will your auto insurance company let you choose which parts you want?
The answers to all these questions are: “It depends.”
OEM and aftermarket parts
You have two main choices when fixing your car: original equipment manufacturer (OEM) parts and aftermarket parts, which are produced by other companies not connected with the car’s manufacturer. The great advantage of aftermarket parts is their cost: OEM parts can cost 60 percent more. But are they worth it?
Russ Rader, a spokesman for the Insurance Institute for Highway Safety, points to a 2010 institute report that delivered mixed results. For example, in a collision test comparing OEM and aftermarket bumpers in a Dodge Ram, the two parts performed equally well. But in another test — this one with a Toyota Camry — “there were clear differences,” according to the report. In this test, the OEM part performed much better than the aftermarket part.
Nevertheless, auto insurance companies generally believe aftermarket parts are just as good as OEM parts. If you want to guarantee OEM parts, you’ll have to dig deep into your pockets.
Richard McGrath, president and CEO of the McGrath Insurance Group in Massachusetts, points out that some insurers will not pay for OEM parts. But McGrath says you’ll most likely want these parts because they’re more reliable and long-lasting than aftermarket parts.
However, keep your own situation in mind: If you have an older car, OEM parts may not even be available anymore. And even if they are, you may not care whether the parts you’re replacing will last a long time, particularly if you’re planning to sell your car in a year or so anyway.
McGrath also advises car owners to separate cosmetic from functional considerations. Consider a paint job. “A car painted on one day is unlikely to exactly match a car painted last year, even if they are painted with the same standard color,” McGrath says. “Many insurance carriers will not pay to have the paint blended so that it all looks the same.”
You may care more about the paint job if you’re driving a newer car. However, the average car on the road today is 10 years old.
Be informed about what’s covered
Amy Bach, executive director of the nonprofit advocacy group United Policyholders, advises consumers to take responsibility for knowing what their policies cover. If the insurer doesn’t make the rules clear in the policies, she offers an insider’s view to help you figure out what you’re getting: “Insurers have a payment schedule for everything — and it’s calibrated to aftermarket parts.”
This means that even though insurers may not specifically state “no OEM parts,” they’ll make you jump through hoops to get those parts. So if you decide OEM parts are critical for you, look for hints. If your insurer says that it’s going to send you to an approved vendor for repairs, that’s a good sign you’re going to get aftermarket parts. With most auto insurers, a body shop gets to be a preferred vendor by keeping costs low.
However, if you can pick your repair shop, find one that prefers to use OEM parts. You and your mechanic then will have a crack at convincing the insurer that OEM parts are essential.
No industry standard for parts
What do auto insurers say about OEM versus aftermarket parts? Bob Passmore, senior director of policy at the Property Casualty Insurers Association of America, advises consumers that there’s no industry standard for car parts.
“Every policy is different. Some might have ‘aftermarket’ written in the policy, while others do not,” Passmore says. “Some don’t use aftermarket at all. Others use aftermarket for cosmetic parts, while some companies will pay for OEM for cars that are less than a year old.”
Although Passmore says it may be possible to buy a policy that guarantees only OEM parts in all circumstances, it may be hard to find — and expensive.
Individual auto insurance companies are reluctant to discuss the issue.
A spokeswoman for Allstate does say that it “has a policy of customer choice when it comes to the use of aftermarket crash parts or OEM parts.” Allstate says it authorizes only aftermarket parts that are certified by the Certified Automotive Parts Association, and even then only when they’re for cosmetic rather than structural fixes.
Whatever you decide, keep in mind that as with so many aspects of auto insurance, it’s a balance between what you want and what you can afford.
As Allstate puts it: “The price competition generated by the availability of (aftermarket) parts has helped keep repair costs down allowing Allstate — and most other carriers — to provide affordable auto coverage to consumers.”