Aftermarket Parts

Aftermarket parts are replacement parts that are not made by the original equipment manufacturer. Aftermarket parts are used to replace damaged parts in automobiles and other equipment, but their use may alter the coverage of an insured item. They are similar to generic pharmaceuticals in that they are cheaper than brand name medication, but are likely to have similar effectiveness.

Repairing a damaged vehicle can be expensive, and motorists may request aftermarket parts to be used whenever possible because they tend to be less expensive than parts made by an original equipment manufacturer (OEM). Depending on the language of the auto policy, allowing the repair shop to use aftermarket parts instead of OEM parts may allow the insurer to alter the policy’s coverage going forward. In other words, insurance companies like aftermarket parts as much as the budget-conscious consumer does because they don’t necessarily have to insure them.

When purchasing a new insurance policy or reviewing an existing one, aftermarket coverage is usually found in the custom parts and equipment provision. This part of the policy provides coverage for damage to aftermarket parts, though the coverage may have relatively low limits. In some cases the insured may wish to purchase additional coverage on aftermarket parts, especially if upgrades were made to the vehicle that were not installed by the vehicle manufacturer. Upgrades may include custom paint jobs, different wheel rims, stereo systems or detailing.

The amount of money that an insured driver may expect to receive for repairs to aftermarket parts and other upgrades depends on the insurer’s replacement schedule. In many situations, the insurer will depreciate the original value of the aftermarket parts according to a formula, and will only cover the value that remains. The formula used by the insurer calculates the actual cash value of the parts.

If a claims adjuster determines that the vehicle is totaled, then the insured will only pay for the value of the insured loss. This typically does not include the loss of the upgrades.

The issue isn't whether high-quality aftermarket parts exist or are never the best option. Sometimes, they may actually be the only option. If a car is older, aftermarket parts may be the only choice for some repairs. While the quality of some aftermarket parts may be questionable, most parts are equal to, if not better than, OEM parts and are usually more readily available than OEM parts.