Your insurance company probably won't pay for the same parts that came on your car from the factory. That's the short answer most drivers don't hear until they're already filing a claim.
OEM (Original Equipment Manufacturer) parts come directly from your vehicle's maker—identical to what was installed when the car was built. Aftermarket parts are made by third-party manufacturers and designed to do the same job. Both can fix your car. The price difference, though, is significant.
According to the National Association of Insurance Commissioners (NAIC), aftermarket parts cost 20-50% less than OEM equivalents. That gap explains why approximately 80-90% of collision repair parts used in the U.S. are aftermarket or recycled, based on Automotive Body Parts Association industry data.
Your policy language determines what gets covered. Most standard policies default to aftermarket parts unless you've paid extra for something different.
How Insurers Handle Parts Replacement
Insurance companies want to restore your vehicle to pre-accident condition at a reasonable cost. Reasonable doesn't mean cheapest—it means cost-effective while meeting quality standards.
Standard Policy Approach
Most collision and comprehensive policies authorize repair shops to use "like kind and quality" parts. This wording gives insurers flexibility to approve aftermarket components that meet functional specifications. Your insurer pays based on actual parts used, so total claim payouts run lower with aftermarket parts. Not because of arbitrary cuts—because the parts genuinely cost less.
The Adjuster's Role
When you file a claim, an insurance adjuster evaluates damage and creates a repair estimate. This estimate specifies which parts are authorized and at what price point. Adjusters typically reference industry databases that list both OEM and aftermarket pricing for each component.
State Regulations Shape Options
Where you live significantly impacts your parts options:
- California: Insurers must notify consumers in writing if non-OEM parts will be used and guarantee aftermarket parts for the duration of ownership (California Insurance Code Section 758.5).
- Illinois: Non-OEM parts cannot be used on vehicles less than 2 years old without consumer consent (Illinois Insurance Code 155 ILCS 5/143a).
- New York: Insurers must disclose use of non-OEM parts in writing, and parts must be identified as "not made by the original manufacturer" (New York Insurance Law Section 3411).
- Texas: Aftermarket parts must be at least equal in quality to OEM parts, with written notice required (Texas Insurance Code Chapter 1952).
- Florida: No requirement for OEM parts; aftermarket parts must be disclosed and of like kind and quality (Florida Statute 626.9743).
OEM vs. Aftermarket: The Real Cost Gap
The financial difference between OEM and aftermarket parts varies dramatically based on your vehicle and repair scope. Here's what current industry data shows:
| Category | Aftermarket Parts | OEM Parts |
|---|---|---|
| Average Collision Repair Cost | $3,000 - $5,500 | $4,000 - $8,000 |
| Price Differential Per Major Repair | Baseline | $200 - $2,000 higher |
| Luxury Vehicle Major Repairs | Baseline | $3,000 - $10,000 higher |
| OEM Endorsement Annual Premium | Not applicable | $50 - $200 additional |
| Typical Repair Timeline | Standard | 2-8 weeks longer (supply chain dependent) |
The National Automobile Dealers Association reports that OEM parts availability issues can delay repairs by 2-8 weeks compared to aftermarket alternatives. For drivers who need their vehicle back quickly, this timeline difference matters as much as cost.
Higher-end vehicles show the largest price gaps. A fender replacement on a luxury sedan might cost $800 in aftermarket versus $2,500 in OEM. Multiply that across multiple panels, and total repair estimates diverge by thousands.
When Insurance Actually Covers OEM Parts
Standard auto policies rarely guarantee OEM parts, but several scenarios trigger original equipment coverage:
OEM Parts Endorsement
The most direct path to OEM coverage is purchasing an OEM parts endorsement (sometimes called "original equipment coverage" or "genuine parts coverage"). This add-on typically increases annual premiums by $50-$200, varying by insurer, vehicle value, and state. For newer vehicles or luxury models, this investment often makes financial sense given the substantial price gap at repair time.
New Vehicle Policies
Some insurers automatically include OEM parts coverage for vehicles under a certain age—commonly two to three years. Illinois law specifically prohibits non-OEM parts on vehicles less than two years old without consumer consent. Check your policy declarations page for vehicle age provisions.
Lease Requirements
Leased vehicles often require OEM parts to comply with lease terms. If your insurance doesn't cover OEM, you may face out-of-pocket costs or potential lease violations. Review your lease agreement alongside your insurance policy to identify gaps.
When You're Not at Fault
If another driver caused the accident, their liability coverage pays for your repairs. You can negotiate with their insurer for OEM parts, especially if your vehicle is newer. At-fault carriers sometimes agree to OEM to settle claims quickly and avoid disputes.
Paying the Difference
Without an OEM endorsement, you can still request original parts—you'll just pay the difference between what your insurer covers (aftermarket pricing) and actual OEM costs. On a $5,000 repair, that difference might range from $500 to $2,000 depending on components involved.
Choosing the Right Parts Coverage
Your parts coverage choice comes down to vehicle value, how long you plan to keep the car, and your budget for premiums versus potential out-of-pocket repair costs.
For newer vehicles, luxury models, or leased cars, an OEM parts endorsement provides peace of mind and protects resale value. The $50-$200 annual premium increase typically pays for itself with one moderate claim.
For older vehicles with lower market value, standard aftermarket coverage usually makes more financial sense. Quality aftermarket parts restore functionality without inflating premiums.
Before your next renewal, review your policy's parts language. Ask your agent directly: "What parts does my collision coverage authorize?" The answer affects every future claim you file.
Compare quotes that include OEM parts endorsements alongside standard coverage. Seeing the actual premium difference for your specific vehicle helps you make an informed decision about parts coverage before you need it.
Frequently Asked Questions
Do aftermarket parts void my vehicle warranty?
Under the Magnuson-Moss Warranty Act, manufacturers cannot void your warranty solely due to aftermarket parts. They must prove the specific aftermarket part caused the failure. However, lease vehicles may have separate contractual requirements for OEM parts during warranty work.
Are all aftermarket parts low quality?
Quality varies significantly by manufacturer. Many aftermarket parts carry certification from the Certified Automotive Parts Association (CAPA), which requires components to meet specific quality and safety standards. Certified aftermarket parts undergo testing for fit, finish, and durability comparable to OEM specifications.
Can I choose which parts are used in my repair?
You can request OEM parts, but your insurer may not cover the full cost. You'll need to pay any difference between aftermarket pricing (what insurance authorizes) and OEM pricing (what you want). State laws vary on disclosure requirements and consumer rights.
Do insurance companies profit from using cheaper parts?
Insurers use aftermarket parts to control overall claim costs, which helps keep premiums lower for all policyholders. The goal is restoring vehicles to pre-accident condition cost-effectively—not maximizing individual claim profits.
Will using aftermarket parts affect my vehicle's resale value?
This depends on the parts used and how well repairs are documented. CAPA-certified aftermarket parts installed by reputable shops typically don't significantly impact resale. Luxury vehicles may retain value better with documented OEM repairs.
How do I add OEM parts coverage to my policy?
Contact your insurer and request an OEM parts endorsement. Expect annual premium increases of $50-$200 depending on your vehicle, location, and coverage limits. Not all insurers offer this endorsement in every state.
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