Consumer Reports Reminds Car Owners to Avoid Aftermarket Parts

In a post-Labor Day news release, is once again reminding consumers how to avoid a claims-related problem should they be unlucky enough to have been involved in one of the estimated 75,000 to 100,000 auto insurance claims that will be filed as a result of the holiday weekend.

“In our most recent surveys,” the organization said, “10 to 26 percent of filers encountered a claims-related problem, depending on the carrier. So it pays to know the right procedures for filing a claim and how to deal with any glitches you might encounter.

According to the release, “Picking a top-rated insurer is also key to controlling your costs. An insurer can charge less in premiums but cost you more overall by lowballing loss estimates, forcing the repair shop to cut corners, and making you pay extra for the manufacturer’s replacement parts if you choose them over cheaper knockoffs.”

The group suggests that consumers turn to the Consumer Reports Car Insurance Buying Guide and their Guide to Insurance Claims for advice on how to “get your due” from car insurance policies.

In the April 2012 Consumer Reports Money Adviser, the group warns, “You might be pressured to take your car to a shop in the insurer’s direct-repair program or to use cheaper replacement parts instead of original equipment manufacturer (OEM) parts. You’re under no obligation to accept either. Tests have found that some non-OEM parts fit poorly, are more prone to rust and corrosion, and might not meet federal safety standards.”

Consumer Reports notes in its Car Insurance Buying Guide that, based on its surveys, respondents’ satisfaction with repairs was significantly lower among those who felt pressured to use DRP shops and non-OEM parts. And respondents who said they were pressured to use non-OEM parts had significantly more problems with their repairs.

Consumer Reports Money Adviser: April 2012
Consumer Reports Car Insurance Buying Guide

by CollisionWeek:

New Aftermarket Parts Regs Receive Final Approval in California

California Insurance Commissioner Dave Jones announced on Friday that the Office of Administrative Law (OAL) has approved amended regulations submitted by the California Department of Insurance (CDI) regarding the use of aftermarket crash parts.

The new regulations are expected to become effective on January 30, 2013 with compliance required 90 days after they are filed with the Secretary of State, or on March 30, 2013. Any claims handling that takes place on or after the compliance date of March 30, 2013 will be required to comply with these regulations.

Specifically, the new regulations will:

  • Require an insurer to pay for the costs associated with returning a defective part and the cost to remove and replace the defective part with a compliant non-OEM part or an OEM part;
  • Require the current insurer’s warranty be expressly stated in the estimate of repair generated by the insurer;
  • Require an insurer to cease use of a part known to be non-compliant, and to notify the part distributer within thirty (30) days;
  • Require an insurer to pay for an amount to repair the damaged vehicle to its pre-loss condition in a good and workmanlike manner, based upon the repair standards required by auto body repair shops licensed by the Bureau of Automotive Repair.

Commissioner Jones said the new regulations were sought to further protect California consumers from physical and financial harm caused by defective or inferior aftermarket parts and to enhance insurer accountability in the claims process. “The amendments build on existing protections by requiring insurers to settle automobile insurance claims using repair standards described by the Bureau of Automotive Repair, and not the insurer’s own standards of repair,” said Commissioner Jones. “This also places greater accountability on the insurer when they require use of an aftermarket replacement part so that damaged automobiles are repaired properly and safely.”

The Insurance Department said that after investigating complaints from consumers and repair shops and evaluating the law, the Department drew the conclusion that defective or otherwise non-compliant aftermarket parts continued to infiltrate the repair process due to insurers’ failure to perform the necessary steps to ensure public safety.

CDI said it had been made aware of defective aftermarket bumper reinforcements, hood latches, and other safety related parts being required by insurers that otherwise were not compliant with current repair standards. CDI said it had also been made aware of substantial costs borne by automobile repair shops and their customers associated with installing defective or poorly fitting parts required by insurers. Performing repairs that do not comply with current repair standards or placing an inferior aftermarket part in a vehicle may cause the vehicle’s value to depreciate. Defective parts may cause injury or even death if they malfunction, the Department said.

During the formal rulemaking process to develop the amended regulations, CDI listened to stakeholders representing consumers, insurers, shops, distributors, and automobile manufacturers. CDI also held a pre-rulemaking workshop in November 2011, which included strong representation of many stakeholders involved in the process.

Download the final amended regulations

by Collision Week: