Drivers who file a car insurance claim after a collision may be shocked to find the check they receive is not enough to cover the full cost of repairs.
Lawrence Bailey learned that lesson after hitting an embankment and damaging his Mercedes.
"It bent the tie rod ... there is some damage to my wheel," Bailey said. "The lower control arm was bent."
The repair bill came to roughly $2,900.
But the shop Bailey chose used original Mercedes parts — known as OEM, or "original equipment manufacturer," parts. His insurance policy only covered aftermarket parts, which are reproduced components made by a third party.
After his deductible, insurance sent Bailey a check for just $947. He had to take out a nearly $2,000 loan to cover the rest.
"I didn't know that it had to be aftermarket. Because I had never seen that clause on my insurance," Bailey said.
Watch as an auto body shop expert shows how to get the coverage you deserve:
Aftermarket parts in many repair estimates
Tyler Damron, manager of Glendale Body Shop, said many insurance companies routinely base repair estimates on aftermarket parts rather than OEM parts largely because aftermarket parts are cheaper.
But Damron argues the cost-saving measure could put consumers and consumers' wallets at risk.
"None of those parts have been crash tested. None of those parts are warrantied under the manufacturer's warranty," Damron said.
In his experience, Damron said an aftermarket part may not fit the same as a product that comes straight from the vehicle's original manufacturer.
"They're made with different plastics because they're copies of copies that don't seem to fit quite well," he said. "It ends up being bigger issues, longer times for repairs, and then send-backs or improperly repaired cars."
Insurance company Progressive, unaffiliated with Bailey's claim, explains on its website that companies write estimates with aftermarket parts, "because they can return a vehicle to pre-loss condition and usually cost less than OEM parts. This helps keep repair costs in check, resulting in lower premiums for all policyholders."
What to do if you want OEM parts
Damron said drivers who want OEM parts, but whose insurance won't cover them do have options. One way forward is hiring an independent appraiser.
"An appraiser definitely can get you original parts within reason or some way to get the funds to pay for the original parts," Damron said.
To be proactive, drivers can also add an OEM endorsement to their policy before they ever get into a wreck.
"You might be spending between $100 and $200 over the year for an OEM endorsement, but it's going to save you thousands in the long run if you have a claim," Damron said.
Drivers and their shops can always choose OEM parts, but if insurance won't cover the full price, the difference comes out of pocket, which is what happened to Bailey.
We reached out to Bailey's insurer to see if they could approve the use of OEM parts, but have not received a response yet.
"If you have two or three bills like that, it will wipe you out," he said.
So take a moment to understand the type of parts that are covered by your insurance policy in the event of a crash, so you don't waste your money.
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