Aftermarket parts are replacement parts used to replace damaged parts in an automobile or any other equipment. The original equipment manufacturer does not make them, so their utilization might change the coverage and inclusion of insurance. They are similar to the less expensive branded medicine that might have a similar effect on the popular pharmaceutical company. 

The Certified Automobile Parts Association (CAPA) gives guidelines and rules for aftermarket parts. This association is the highest quality level for aftermarket parts regarding safety because of the detailed high standards and quality testing.

How does it work?

Fixing a broken vehicle can be costly. Owners might want aftermarket parts to be utilized whenever possible as they are most often more affordable than the parts made by an original equipment manufacturer (OEM). Depending on the auto policy, permitting the repair shop to use aftermarket parts instead of OEM parts may let insurers adjust the policy’s coverage moving forward. 

The National Association of Mutual Insurance Companies declares that aftermarket parts are 50% cheaper than their OEM counterparts, saving automobile owners nearly $2.2 billion yearly on repairs.

Aftermarket parts might possibly decrease auto insurance premiums. Insurance agencies love aftermarket parts because they don’t need to safeguard them.

While buying another insurance policy or reviewing a current one, aftermarket coverage is generally found in the custom parts and equipment provision. This coverage covers aftermarket parts, usually with low limits. Sometimes, the customer may wish to buy extra coverage on aftermarket parts, mainly when general upgrades were made to the vehicle that was not from by the vehicle maker. General upgrades may include custom painting, changing wheel rims, sound systems, or detailing. 

OEM and Aftermarket Parts

You may wonder if aftermarket parts would be of high quality. But sometimes, aftermarket parts may be the only option available. Suppose a car is a vintage model. In that case, aftermarket parts are the only choice. Only some aftermarket parts might be problematic; most aftermarket parts are equivalent to, or perhaps even better than, OEM parts. Moreover, aftermarket parts are more readily available than OEM parts.

While some people say that aftermarket parts can make warranties invalid, the Magnuson-Moss Act prohibits “tie-in sales.” So the manufacturer must not compel a customer to use only their product for the warranty to stay valid. This act, however, applies only to products used for personal purposes.

Special considerations

How much money an insured driver might get for repairs to aftermarket parts relies on the insurer’s replacement schedule. Generally speaking, the insurer will depreciate the original value of the aftermarket parts as per the formula and will just cover the remaining.

The formula calculates the actual cash value of the parts. In case a claims adjuster specifies that the vehicle is totaled, then the insured need to pay just the compensation value for the insured loss. This typically excludes the loss of upgrades or redesigns.

Depending upon the state in the US, insurance regulations relating to the utilization of aftermarket parts are different. Starting around 2017, 31 states expected first-party insurance providers to disclose repair estimates with the utilization of non-OEM parts. Then, 20 states required the producer of aftermarket parts to be identified, and 13 states required aftermarket parts used in repair and maintenance to be of “like kind and quality” as OEM parts. Six states likewise required approval of the insured before utilization of aftermarket parts in repairs.


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