Insurance Coverage for Aftermarket Auto Parts

Insurance Coverage for Aftermarket Auto Parts

Many people work on fixing up cars so they can resell them for a profit. A company might build custom cars that require special parts not easily found on the market. This type of manufacturer might also serve customers who need special parts to fix a problem. Here’s a look at what aftermarket parts are and how they affect insurance.

Meaning of aftermarket parts

An aftermarket part, also known as a performance part, is made by a producer who is not the original equipment manufacturer (OEM). These newly produced rather than used parts help lower costs for auto repair and modifications to improve a vehicle’s appearance. If you are trying to fix a vehicle to resell it, keep in mind that aftermarket parts are more affordable, but a standard auto insurance plan may not cover the parts.

Aftermarket parts vs. OEM parts

Your two options for replacing hard-to-find auto parts are the original equipment manufacturer or a third party that creates special aftermarket parts. While all the big-name automakers are considered OEMs, many independent smaller manufacturers design customized aftermarket parts for auto shop partners. This low-profile market quietly earns billions of dollars per year.

An insurance company uses the term “OEM” only to refer to the original automaker, not an outside organization that makes custom parts. It’s possible to find higher quality parts for bargain prices among aftermarket options, but it comes down to the producer’s leadership, reputation, and resources.

Does auto insurance cover OEM parts?

OEM parts are typically included in repair estimates issued by an insurance company. It mostly depends on the year, make, and model of the vehicle in question and the kinds of repair work needed. Usually, specific auto parts must be replaced by the original automaker in standard auto insurance policies to receive a payout. However, some plans, such as for motorcycles, are flexible to cover aftermarket parts made by third parties beyond the original manufacturer.

Should repair estimates include aftermarket parts?

An insurer often includes aftermarket parts for repair estimates if it can save money on restoring the vehicle to its pre-loss condition. Nonetheless, be aware that you can end up paying the difference between OEM and aftermarket parts.

How an insurance company writes estimates for used parts

Some independent manufacturers repurpose, refurbish, and recycle used auto parts to sell as car repair solutions. These used parts are not considered aftermarket parts. Find out from your insurance company if it covers used parts.

Do state laws affect aftermarket parts?

Some states regulate whether aftermarket parts can be included in insurance estimates. These regulations vary among states, so check your state insurance department to determine how your state approaches aftermarket issues.

Get the required coverage with CAV!

Some people need insurance coverage for aftermarket parts, especially if they drive a custom or classic car manufactured by an automaker that no longer exists. Contact us at CAV Insurance Agency, Inc. today for more information on securing the right auto insurance coverage for your personal needs.

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