Understanding Insurance Company Policies on OEM Replacement Parts After a Vehicle Wreck

When a vehicle is involved in an accident, the question of whether the insurance company will cover original equipment manufacturer (OEM) replacement parts can be a complex one. This article aims to provide a comprehensive understanding of the policies and considerations that play a role in determining whether OEM parts will be covered, especially for cars purchased within the last 7 years.

Factors Influencing Insurance Company Decisions

The decision to use OEM, aftermarket, or used parts for vehicle repair is influenced by several factors, including the age of the vehicle, the condition of the vehicle before the accident, the level of insurance coverage, and the specifics of the insurance contract.

Age of the Vehicle and Insurance Coverage

For vehicles less than 7 years old, many insurance companies prefer OEM parts due to higher quality and reliability. OEM parts are expected to meet the exact specifications and performance standards of the original vehicle, ensuring that the repair does not compromise the overall safety and functionality of the vehicle. However, if the vehicle is older, the insurance company might opt for aftermarket parts to balance cost and performance.

Cost Considerations and Total Loss

The cost of repairs is a significant factor in determining whether the vehicle will be considered a total loss. If repairing the vehicle with OEM parts would cost more than its actual cash value (ACV), the insurance company may offer a settlement based on the vehicle's value rather than covering the repair. In such cases, aftermarket parts, which are usually less expensive, might be used instead.

Condition of the Vehicle and Available Parts

The condition of the vehicle before the accident is also crucial. If the vehicle was in good condition and the parts needed to repair it can be obtained at a reasonable cost, insurance companies are more likely to cover OEM parts. Conversely, if the vehicle was older or damaged significantly, the insurance company might opt for aftermarket or used parts to minimize costs.

Insurance Company Policies

Insurance companies have different policies regarding the use of OEM, aftermarket, and used parts. Some companies have specific restrictions or allowances, depending on the age and condition of the vehicle. In the UK, for instance, OEM parts are generally preferred, but insurance companies may opt for non-OEM or even used parts if it results in a cost-saving that is considered justified.

Quality and Availability of Aftermarket Parts

Aftermarket parts are often considered if they are of a high enough quality to fit the vehicle precisely and function as well as OEM parts. Some non-OEM manufacturers are recognized by insurance companies as preferred suppliers, with their parts meeting the necessary standards to be used in repairs.

Considerations for Used Parts

Used parts can also be used, especially if they have been completely prepped and repainted. This process ensures that there is no noticeable difference in color or appearance, making the repair look seamless. For example, using a prepped and repainted used door can save costs while maintaining a similar quality of repair.

In conclusion, the decision to use OEM, aftermarket, or used parts after a vehicle wreck is a multifaceted issue that depends on the specific circumstances and insurance policies in place. While OEM parts are often preferred for newer vehicles, insurance companies may opt for less expensive options to minimize repair costs. It is advisable to review your insurance policy and discuss potential repair options with your insurance provider to ensure clear and transparent communication about the expected outcomes.