OEM stands for original equipment manufacturer. Simply put, OEM parts are replacement parts made by the same company that manufactured the original parts for your vehicle. If your car is repaired after a covered insurance claim, the repair shop may use OEM parts, depending on your insurance policy and how the repairs are handled. Knowing what OEM parts are and how they differ from other replacement parts can make it easier to understand your repair options after an accident or other covered loss.
OEM parts versus aftermarket parts
When a vehicle is repaired after a covered loss, the repair shop may use either OEM parts or aftermarket parts. While OEM parts are made by the original vehicle manufacturer, aftermarket parts are produced by third-party manufacturers. According to the Insurance Information Institute, OEM parts are supplied by auto manufacturers under their own brand name, while aftermarket parts are manufactured independently and are generally less expensive.
Both OEM and aftermarket parts may be used for insurance-covered repairs. Which type is used can depend on several factors, including the language of the insurance policy, the repair shop's practices, state regulations, and the insurer's repair guidelines.
How does your insurance policy address parts?
Whether OEM or aftermarket parts are used during a covered repair often depends on the wording of your auto insurance policy. Some policies state that repairs will be completed using parts of like kind and quality, which may include aftermarket parts that meet similar standards. Other policies or optional endorsements may provide for the use of OEM parts under certain circumstances.
If a policyholder prefers OEM parts, it is helpful to review the policy before repairs begin and discuss available options with both the insurer and the repair facility. In some situations, choosing OEM parts may involve paying the difference in cost if the policy does not include that coverage.
Does the type of part affect a claim?
The type of replacement part used generally does not determine whether an insurance claim is covered. Instead, it may affect the overall cost of the repair and the amount a policyholder may need to pay out of pocket if the preferred part is not fully covered under the policy.
Before repairs are completed, policyholders may benefit from reviewing their policy provisions regarding replacement parts and discussing any questions with their insurer. Understanding how the policy addresses OEM and aftermarket parts can help avoid unexpected costs during the claims process.
To learn more about how vehicle repairs and insurance claims work, visit the claims process page in the Infinity Insurance Agency, Inc. (IIA) Knowledge Center.
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Whether you are purchasing a new policy or reviewing your current coverage, understanding how your insurance policy addresses vehicle repairs can help you make more informed decisions. IIA works with over 20 insurance carriers to help drivers find personal auto insurance that fits their budget. Our licensed Spanish-bilingual agents can explain your coverage options, answer questions about your policy, and help you explore available choices.
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