What Type of Car Parts are Used by Insurance Companies in Auto Claims?

OEM Parts, After Market Parts, and Used Parts

A mechanic repairing a car as it sits elevated on a lift in a garage

Joe Raedle / Getty Images

If you are in a car wreck, you’re probably thinking more about the speed of repair than the parts the shop will use to fix your vehicle. But it’s still a good idea to know the basics. Auto body shops have lots of different types of parts available to repair your damaged car. Still, there are three main types that they’ll choose from: original equipment from the manufacturer (OEM), aftermarket parts, and used parts.

What Kinds of Car Parts are Primarily Paid for by Insurance Companies?

The answer to the question can vary depending on which insurance company you are insured by, what type of coverage you’ve purchased, and how your policy is set up. Take a look at the different kinds of car parts available and why body shops and insurance companies like them or not.

OEM Parts

Original equipment manufacturer (OEM) parts are what they sound like: They are original pieces of equipment made by your car's manufacturer. OEM parts are brand-new, never used before parts that go directly to your vehicle. They are often more expensive than other options and can sometimes take longer to receive. They must be ordered from a single manufacturer; lots of body shops do not keep tons of OEM parts on hand because of this cost and will have to order the parts before making repairs.

What the Body Shop Thinks About OEM Parts

You might think that the need to custom order parts for each repair would mean shops would hate OEM parts—but in most cases, you’d be wrong. Body shop repair people love OEM parts because they fit perfectly without the need for any adjustments—they’re like the color by number portraits of the auto shop world. Shops also make a more significant profit on repairs made using OEM parts as compared to repairs made using other types of parts. Easier repairs, plus more money left in their pocket, make OEM parts a no-brainer for body shops to sell.

Insurance companies, on the other hand, are not a huge fan, for obvious reasons: The job of insurance companies is to keep their costs as low as possible. Insurance companies may only pay for the cost of OEM parts if no other parts are available, or if you have requested an OEM endorsement (which you pay extra for) on your policy. 

Insurance companies are looking to repair your vehicle and get you back on the road, which can usually be done just as well by using other types of car parts rather than OEM parts. It is not only the job of the insurance claim adjuster to make your vehicle whole again, but also to do so for the smallest amount of money.

In reality, OEM parts are great, but they aren’t a necessity. If a repair is done properly with a working part, it doesn’t matter whether or not you’re able to use an OEM part or an aftermarket part. Often, aftermarket parts will be just as high-quality as OEM parts—just available at a better price.

Aftermarket Parts

Aftermarket parts are parts made by a company other than your car's manufacturer. The parts are still new, and they have never been used on another vehicle—they are just not purchased directly from your car manufacturer. Think of aftermarket parts as the off-brand version of your favorite foods—they’re available for much cheaper but usually still work just as well.

The specs on the aftermarket parts should be very close or even identical to the specs on OEM parts. 

What the Body Shops Think About Aftermarket Parts

Good body shops can handle repairs made using aftermarket parts just as well as repairs made using OEM parts. The repair of your vehicle will look the same as it did before having any damage. However, sometimes adjustments may need to be made by the body shop repair people to get the parts to fit just right. It can be a hassle, but a good shop can still get the job done.

Insurance companies, on the other hand, don’t have to get their hands dirty, making repairs and adjusting parts to fit. Insurance companies prefer aftermarket parts to OEM parts because they are cheaper. Lowering the cost of the claim is an essential part of an insurance claim adjuster's job. If aftermarket parts were never used, the high cost of OEM parts would send insurance rates soaring. Most of us feel we already pay more than enough for our insurance coverage, so aftermarket parts are a godsend. Standard insurance coverage typically covers aftermarket parts and not OEM parts.

How should you feel about aftermarket parts? Unless you work in an auto shop, you’ll probably never even know the difference.

Used Parts

Used parts are just that, used. They come from the junkyard. Lots of vehicles get discarded every day for various reasons. Anything from a car accident to engine trouble to age can all become a way for a car to make it into the junkyard. Most of the time, lots of parts are still good on a discarded vehicle. Those parts can be resold individually to repair other vehicles. The great thing about used parts is they are usually OEM parts that have been used.

What the Body Shop and Insurance Company Think About Used Parts

Both body shops and insurance companies like to use used parts in repairs. They fit great and can be made to look and work as well as new. Used parts are cheaper than OEM parts so that insurance companies can save some money. However, sometimes the parts needed can be hard to find, so they are not always an option. The ability to recycle something sitting in the junkyard is also a perk of used parts.

More than likely, your vehicle will be repaired with used or aftermarket parts in an insurance claim. It is very common among most insurance carriers. If used or aftermarket parts are a problem for you, request OEM parts ahead of an auto claim—know that you will have to pay extra.

Talk to your insurance agent about an OEM parts endorsement. If one is not available, check around for different insurance companies to see if it is a possibility for your vehicle.