State Legislatures Take Aim At Aftermarket Parts
Two separate U.S. state legislatures have recently introduced bills that would make it illegal for insurers to require that aftermarket parts be used for collision repairs.
The two bills were both introduced in February 2013 by offer by both republicans and democrats. The bills basically prohibit the required use of aftermarket parts for sheet metal and body work, including fenders, bumpers, grills, headlights and taillights. Also, both bills ask that genuine crash parts, or Original Equipment Manufacturer (OEM) parts, be offered for newer vehicle repairs.
Republican Delegate Mark Fisher introduced House Bill 1375 to the Maryland General Assembly on Feb. 13, 2013. If passed, the bill would prohibit adjusters, appraisers or insurance providers from requiring that repair facilities use a specific vendor or part procurement process, or other materials needed to repair the vehicle. The bill also requires an insurer to authorize repairs using OEM parts, for vehicles five years and newer, although the owner of the vehicle can choose to use aftermarket parts. The Maryland bill would also make it illegal for an insurance provider to require that the vehicle owner use a certain repair facility.
Vermont Democratic House Representatives Bill Botzow and Michael Marcotte introduced House Bill 362 to the Vermont State Committee on Commerce and Economic Development on Feb. 26, 2013. This bill is similar to Maryland’s House Bill 1375, except it requires that if an insurance agent requires the use of an aftermarket part, the part must be at least equal in like kind and quality to the OEM part in terms of fit, quality and performance.
Vermont House Bill 362 also contains details about how insurers would handle their aftermarket part recommendations. Including, all aftermarket parts manufactured after Jan. 1, 2014 would carry sufficient permanent identification so the repairer can identify the manufacturer. And, aftermarket parts would not be required by an insurer if the repair of automobiles placed in service during the two years immediately preceding the claim report and which have 30,000 or fewer miles recorded on the odometer. Lastly, an insurer would have to identify clearly on the estimate all aftermarket parts installed on a vehicle, if any. If aftermarket parts were installed, the insurer would have to disclose to the claimant in writing, either on the estimate or on a separate document attached to the estimate, the following information in bold-faced, capitalized font no smaller than 12-point type:
• This estimate has been prepared based on the use of non-original manufacturer parts. Parts used in the repair of your vehicle by other than the original manufacturer, also known as aftermarket parts, are required to be at least equal in like kind and quality in terms of fit, quality and performance to the original manufacturer parts they are replacing.
Both bills are still in their early stages. Maryland House Bill 1375 was re-referred to Economic Matters on Feb. 26, 2013 and Vermont’s House Bill 362 is currently in committee. These two bills are being closely watched by the Automotive Service Association (ASA), which lists each bill on its legislative website, www.takingthehill.com.
Aftermarket parts are parts not manufactured by the OEM. This industry encompasses all products and services purchased after the original sale including replacement parts, accessories, lubricants, appearance products, tires, collision repairs as well as the tools and equipment. Aftermarket parts are often cheaper than a new, OE part, hence the push by insurance companies for their use. OEMs claim these parts don’t always match up to OE parts when it comes to fit, quality and performance. For clarification purposes, recycled auto parts are used OE parts. These parts were made by the original manufacturer and are identical in fit. Each part is also graded for quality and performance based upon its wear and use.