Does OEM vs Aftermarket Parts Affect Insurance?

Yes, the OEM vs aftermarket decision significantly affects auto insurance claims. Most insurers pay for "like kind and quality" (LKQ) parts by default, which usually means aftermarket or recycled parts, not OEM (original equipment manufacturer). To get OEM parts paid by your insurer, you typically need an OEM endorsement on your policy (typically $30-$80 per year), a vehicle still under manufacturer warranty, or a state law that mandates OEM for certain repairs. About 20 states require written disclosure when non-OEM parts are used on a covered claim.

How insurers decide which parts to use

Standard policy language usually allows the insurer to specify part type.

• LKQ (Like Kind and Quality): aftermarket, recycled, or rebuilt parts equivalent in fit and function.
• OEM (Original Equipment Manufacturer): made by or for the original car maker.
• Aftermarket: made by third parties, often certified by CAPA or NSF.
• Recycled (LKQ in salvage terms): used parts from a totaled donor vehicle.
• Reconditioned: refurbished used parts.

How to get OEM coverage

1. Add an OEM endorsement.Call your carrier and ask to add an "OEM parts" or "original parts" endorsement. Typically adds $30-$80 to annual premium.
2. Check your warranty.New cars under manufacturer warranty often require OEM parts to maintain warranty coverage on adjacent components. Document this and submit to your insurer.
3. Cite state-mandate laws.20+ states require written disclosure when non-OEM parts are used. Some states require OEM on cars under a certain age (often 2-3 years).
4. Insist on OEM in writing.Submit a written demand for OEM citing safety, warranty, and fit issues. Most insurers will pay the difference if you cover it yourself for the rest.
5. Pay the upgrade out of pocket.If the insurer refuses, ask the body shop to install OEM with you paying the difference between LKQ and OEM cost.
6. Appeal or file a DOI complaint.If the carrier refuses to pay for OEM where state law requires it, appeal in writing and escalate to your state department of insurance.

When OEM matters most

Not every repair requires OEM. Use OEM for:

• Structural parts (frame rails, crash beams, A/B/C pillars).
• Safety systems (airbags, sensors, ADAS calibration brackets).
• Painted body panels on vehicles under 3 years old.
• Lights with integrated electronics (LED, ADAS-aware).
• Hybrid/EV battery packs and high-voltage components.
• Parts under active recall.

When aftermarket or recycled is fine

• Non-painted plastic trim (under-bumper covers, fender liners).
• Bolt-on items that do not affect crash performance (mirrors, antennas).
• Older vehicles (5+ years) where OEM is not available or significantly more expensive.
• Cosmetic items where the difference is invisible.
• Mechanical items from CAPA or NSF certified suppliers.

📚 Legal & Regulatory References

• State Aftermarket Parts Disclosure Statutes (about 20 states require disclosure - search "[your state] aftermarket parts disclosure").
• Magnuson-Moss Warranty Act, 15 USC 2301 - cannot void warranty solely for non-OEM parts use.
• NAIC Unfair Claims Settlement Practices Model Act.
• CAPA (Certified Automotive Parts Association) certification standards.
• NSF Automotive Parts Certification.
• 49 CFR Part 571 - Federal Motor Vehicle Safety Standards (crash structure context).

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