What Is OEM Parts Coverage and Why Would You Add It?
After a collision repair, the parts an insurer chooses to use can matter more than most policyholders realize, and by default, cost often wins out over the manufacturer’s original part.
The short answer
OEM parts coverage is an optional endorsement that specifies original equipment manufacturer parts be used in a covered repair, rather than aftermarket or used parts that an insurer might otherwise approve to keep costs down. Without this coverage, many policies allow, or even default to, non-OEM parts as long as they are considered comparable in quality and fit. Adding the endorsement generally increases the premium somewhat in exchange for that assurance.
Why insurers use non-OEM parts by default
Aftermarket parts, made by a company other than the original manufacturer, and used OEM parts salvaged from other vehicles both tend to cost less than a new part sourced from the manufacturer. Because repair costs directly affect what insurers pay out on a collision claim, many policies default to whichever comparable part is more affordable unless the policyholder has added a rider that specifies otherwise. Regulators in many states require that non-OEM parts meet certain quality and fit standards before a shop can use them, but “comparable” is still a looser bar than “identical,” and small differences in fit or finish can show up over time even when a part technically passes inspection.
What OEM parts coverage actually changes
- Original parts specified. With this endorsement in place, a covered repair uses parts made by the vehicle’s original manufacturer rather than aftermarket alternatives.
- More consistent fit and finish. OEM parts are built to the exact original specification, which can matter more on visible body panels or complex components than on parts that are less likely to be noticed.
- Added premium cost. Because OEM parts typically cost more than aftermarket alternatives, adding this endorsement generally raises the premium by some amount, which varies by insurer and vehicle.
When this coverage tends to matter more
Newer vehicles, especially those still under a manufacturer warranty, are the most common case where OEM parts coverage gets considered, since using non-OEM parts on a newer car can sometimes raise questions about warranty terms depending on the part and the manufacturer’s policies. It can also matter more for vehicles where exact fit is harder to replicate, or for an owner who simply prefers original components as a matter of preference rather than necessity.
How it relates to other total-loss and repair coverage
OEM parts coverage is specifically about repairs, which sets it apart from something like new car replacement coverage, which addresses what happens when a car is declared a total loss rather than repaired. The two can complement each other on a newer vehicle, since one governs how a repair is done and the other governs what happens if repair isn’t an option at all.
What to weigh
Whether OEM parts coverage is worth adding tends to come down to how new the vehicle is, whether warranty terms are a consideration, and how much added premium feels reasonable for the assurance it provides. For an older vehicle already several years past its original parts warranty, the case for adding it is generally weaker than for one still fairly new.