OEM Parts Coverage: Original vs Aftermarket Parts Insurance Explained

What Is OEM Parts Coverage?

OEM stands for Original Equipment Manufacturer, meaning the parts are made directly by your vehicle's manufacturer to exact factory specifications. OEM parts coverage is an optional endorsement you add to your auto insurance policy that instructs your insurer to use only those factory-original parts when repairing your vehicle after a covered loss.

Without this endorsement, most standard auto insurance policies allow (and often prefer) aftermarket parts. These are components made by independent, third-party companies. While they may be functionally similar, they're not made by your car's manufacturer and can vary significantly in quality, fit, and compatibility. Learn more about how car manufacturer insurance programs factor OEM parts into their coverage models.

OEM vs. Aftermarket Parts: What's the Difference?

Understanding the distinction between these two types of parts is key to deciding whether this endorsement is right for you.

Aftermarket parts aren't inherently bad. Many meet CAPA (Certified Automotive Parts Association) or NSF International standards. CAPA independently tests parts for weld integrity, corrosion resistance, paint adhesion, and fitment to ensure they match OEM-level performance. CAPA-certified parts are generally safer and more reliable than non-certified aftermarket options. However, for structural, safety-critical, or tech-heavy components, consistency matters, and that's where OEM has a clear edge.

How Standard Policies Handle Parts and What Changes With an Endorsement

By default, most auto insurance policies give the insurer the right to use "like kind and quality" parts, which in practice means aftermarket components. Insurers prefer this because aftermarket parts can cost 20 to 40% less than OEM equivalents, savings they protect, not necessarily you.

When you add an OEM parts endorsement, the dynamic shifts. Your insurer is now contractually obligated to use factory-original parts for covered repairs, as long as those parts are available. If OEM parts aren't available, some insurers will cover the cost difference to source them, while others will fall back to aftermarket.

Coverage Duration Tiers

Some insurers offer tiered OEM coverage based on your vehicle's age:

• Standard OEM Coverage: Typically applies to vehicles within the 3 to 5 most recent model years
• Extended OEM Coverage: Applies to vehicles up to 10 model years old (e.g., Liberty Mutual's Original Parts Replacement typically requires a private passenger auto, 10 years old or newer, with both collision and comprehensive coverage)
• Lifetime OEM Coverage: Applies as long as OEM parts are available, regardless of model year (offered by select insurers like The Hanover)

State-Level Legislative Developments

Two notable state-level developments are reshaping how insurers must handle OEM parts disclosures:

Utah H.B. 119: Utah Governor Spencer Cox signed H.B. 119, the Automotive Repair Business Amendments, into law on March 18, 2026, with aftermarket parts disclosure requirements taking effect May 6, 2026. The insurer notice requirement applies to policies issued or renewed on or after October 1, 2026. Under the new law, when an insurer authorizes non-OEM aftermarket crash parts, the written estimate must clearly identify each non-OEM part and include, in at least 10-point font, a disclosure stating that the parts are not made by the original vehicle manufacturer, must be at least equivalent in fit, quality, and performance, and that warranties on those parts come from the part manufacturer, not the vehicle manufacturer. This makes Utah one of the first states to formally legislate OEM/aftermarket transparency.

Ohio House Bill 636, the Auto Insurance Transparency Act: HB 636 remains in "Introduced" status, with its most recent action being referral to the House Insurance Committee on February 4, 2026. It has not been enacted into law. Introduced December 23, 2025 by Rep. Mark Johnson, the bill would require auto insurers to offer coverage that includes Original Equipment Manufacturer (OEM) parts for repairs, giving policyholders the explicit option to select OEM parts even if they cost more than aftermarket alternatives. It would also require repair estimates to clearly identify each non-OEM replacement part. Together with Utah's law, these bills signal a nationwide shift toward consumer-driven transparency. Learn more about the full landscape of insurance endorsements available in 2026.

Benefits of OEM Parts Coverage and Who Should Get It

For the right driver, OEM parts coverage can be a smart financial decision, not just a premium luxury. Here's who benefits most:

New and late-model vehicles benefit because OEM parts preserve the exact engineering and safety standards the car was built with. Leased vehicles often require OEM repairs under lease agreement terms, and using aftermarket parts could result in financial penalties at lease return. Luxury vehicles (think BMW, Mercedes, or Audi) have precision engineering and proprietary technology built into components that generic aftermarket parts simply can't replicate reliably.

Electric vehicles like Tesla models are prime candidates. Tesla has introduced a High-Priced Propulsion-Related Part Warranty for 2026 model year Model S, Model 3, Model X, and Model Y vehicles, providing an additional 7 years or 70,000 miles of coverage on certain high-priced components, including the PCS assembly, high-voltage contactors, high-voltage system controller, halfshafts, electrical harnesses, cooling fan assembly, and radiator. Tesla's repair guidelines state that Tesla does not allow the use of any used, recycled, alternative, aftermarket, or third-party replacement parts, and instructs users to use only new parts ordered directly from Tesla. Learn more about Tesla and OEM manufacturer insurance programs to see how these programs intersect with parts coverage. Software-driven repairs on modern EVs also introduce new complexities, as covered in our guide to insurance for software-defined vehicles.

How Much Does OEM Parts Coverage Cost and Which Insurers Offer It?

OEM parts coverage typically adds a modest amount to your premium. On average, OEM coverage can cost between $5 and $20 per month, though you might pay more for a newer or luxury car, meaning $60 to $240 per year for many drivers, and as little as $20 to $50 per year on some standard policies. The exact amount depends on your vehicle's make, model, year, and your location.

This cost is increasingly worth locking in because of tariff pressure. A 25% tariff applies to many car parts, and since many of those parts are imported, auto insurance premiums are likely to rise as a result. The 25% tariffs on imported vehicles and parts, effective since April 2025, have already driven a 2.5% surge in average new vehicle prices. Industry analysts expect 5 to 10%+ price elevation on many imported OEM collision parts relative to pre-tariff levels, with larger jumps where supply chains are hard to reroute.

Insurers That Offer OEM Parts Coverage (2026)

Not every insurer offers this endorsement in every state. Availability may also be restricted to vehicles under a certain age (commonly 5 to 10 model years). Always confirm with your agent whether the endorsement is available for your specific vehicle.

Is OEM Parts Coverage Worth the Cost?

Here's a simple way to think about it: if your vehicle is worth significantly more than your deductible and you plan to keep it for several more years, the added protection of OEM coverage is likely worth the premium. If you're driving an older, high-mileage vehicle, the math probably doesn't work in your favor.

With tariff-driven parts inflation accelerating through 2026, locking in OEM coverage now could protect you from even steeper out-of-pocket costs during a future claim. You should also know your right to choose a repair shop after an insurance claim, which works hand-in-hand with parts choice. If you've also made aftermarket upgrades to your vehicle, consider pairing OEM coverage with custom parts and equipment coverage to protect both factory and custom components.

Frequently Asked Questions

Does standard car insurance cover OEM parts?

No, standard auto insurance policies typically allow insurers to use aftermarket or "like kind and quality" parts when repairing your vehicle. This keeps claim costs lower for the insurer, not for you. To guarantee OEM parts are used, you must add an OEM parts endorsement to your policy for a few dollars to $20 per month. Utah's H.B. 119 (signed March 2026) requires insurers to disclose part types upfront, while Ohio's HB 636 would require insurers to offer OEM coverage as a standard option if enacted.

Will using aftermarket parts void my car's warranty?

Under the federal Magnuson-Moss Warranty Act, a manufacturer cannot void your warranty simply because aftermarket parts were used, and they must prove the aftermarket part directly caused the damage. However, this can lead to disputes and delays in warranty claims. Tesla's repair guidance states that used, recycled, alternative, aftermarket, and third-party replacement parts are not covered under any Tesla warranty, so using non-OEM parts can directly jeopardize warranty eligibility on propulsion-related components. Using OEM parts eliminates this risk entirely.

Are OEM parts always better than aftermarket parts?

Not always. For critical safety systems, structural components, and high-tech features (especially in EVs and luxury vehicles), OEM parts are strongly recommended. For cosmetic repairs like a bumper cover or side mirror housing, a quality CAPA-certified aftermarket part may perform comparably at a lower cost. CAPA certification involves factory inspections, material testing, and ongoing quality audits, including decertifications when parts fail to meet standards. The key is knowing which components matter most for safety, warranty protection, and long-term vehicle integrity.

Can I request OEM parts even if I don't have the endorsement?

Yes, but you'll likely pay the difference out of pocket. If your insurer approves an aftermarket part at $400 but the OEM equivalent costs $700, you would need to cover the $300 gap yourself. Utah's new H.B. 119 law (with repair estimate rules effective May 2026 and insurer notice rules for policies issued or renewed on or after October 1, 2026) requires insurers to disclose part types in policy documents and repair estimates. Ohio's proposed HB 636 would give policyholders the explicit right to choose OEM parts, but it remains stuck in committee as of mid-2026.

Which vehicles benefit the most from OEM parts coverage?

New vehicles (under 5 years old), leased cars, luxury vehicles, and electric vehicles benefit the most from OEM parts coverage. These vehicles rely on precision-engineered components that are difficult to replicate reliably with aftermarket alternatives. EVs in particular, like 2026 Tesla Model S, 3, X, and Y, have proprietary battery, propulsion, and high-voltage electrical systems now backed by a new 7-year/70,000-mile propulsion warranty that requires OEM parts for safe, software-compatible, and warranty-compliant repairs. If your vehicle falls into any of these categories, the endorsement cost is well justified given today's rising repair costs driven by tariffs on imported auto components.