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 (Liberty Mutual offers Original Parts Replacement for private passenger autos 10 years old or newer with comprehensive and collision 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 in March 2026, with aftermarket parts disclosure requirements for repair estimates taking effect May 6, 2026. For a policy issued on or after October 1, 2026, the insurer must provide the insured, at the time of issuance and renewal, a written notice stating that the insurer may authorize or specify the use of aftermarket crash parts in the event of a covered loss. 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: As of August 2026, HB 636 has passed both the Ohio House and Senate and is at the enrolled/final-stage point, awaiting gubernatorial action. HB 636 would require certain disclosures, allow consumer choice concerning the use of aftermarket motor vehicle parts, require the offering of coverage for original equipment manufacturer parts, and name this act the Auto Insurance Transparency Act. The legislation does not require insurers to include OEM parts even when their original policy does not include them; in a situation where a consumer did not have a policy with OEM parts, a carrier would be required to permit repairs using OEM parts if the claimant agrees to pay the difference. 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.

California (Mercury Insurance): California Automobile Insurance Company, part of Mercury Insurance, is seeking approval to introduce two optional coverages for its private passenger auto program in California. The filing, submitted July 28, 2026, proposes an October 15, 2026, effective date for new and renewal business. The new OEM parts coverage would require new original equipment manufacturer parts on covered physical damage repairs and would apply to vehicles up to 10 model years old. If approved, this expands OEM endorsement availability in the country's largest auto insurance market.

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, Rivian, and Lucid models are prime candidates because they rely on proprietary battery, propulsion, and high-voltage electrical systems that are difficult to safely replicate with aftermarket parts. Tesla, in particular, restricts covered warranty repairs to new parts ordered directly from Tesla, and using non-OEM components can jeopardize propulsion-related warranty coverage. Learn more about Tesla and OEM manufacturer insurance programs to see how these programs intersect with parts coverage. Knowing your right to choose a repair shop is equally important for EV owners navigating specialized repairs, and EV battery coverage is a related concern for anyone driving an electric vehicle.

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 runs 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. Some insurers charge far less: Acuity charges very little for OEM parts coverage, often about $10 to $15 per year during the first three model years, and OEM parts insurance costs more for older cars because the parts cost goes up substantially, 50% or more, compared to OEM used parts or aftermarket new parts. The exact amount depends on your vehicle's make, model, year, and location.

This cost is increasingly worth locking in because of tariff pressure. The American Property Casualty Insurance Association (APCIA) estimated that a 25% tariff on imported parts would raise parts costs by 10 to 15% and push vehicle service contract loss costs up by 5 to 8%. S&P Global Mobility estimates the semiconductor tariffs alone add $200 to $219 per vehicle in electronic component costs, while PartsTrader data shows 44% of all OEM collision parts sold in the U.S. are manufactured overseas. Insurance analysts project premiums could rise an additional 3 to 4 percentage points in 2026 as a direct result, pushing the average full-coverage policy from roughly $2,100/year toward $2,400 to $2,500. Read our deep dive on how auto tariffs are pushing insurance costs higher in 2026.

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. For a broader view of how add-ons interact, see our guide on car insurance endorsements.

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. 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. Drivers of newer connected cars should also review insurance for software-defined vehicles, since sensor and ADAS calibrations are frequently tied to OEM parts requirements.

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, typically for $5 to $20 per month. Utah's H.B. 119 (effective May 6, 2026 for repair estimates and October 1, 2026 for policy notices) requires insurers to disclose part types upfront, while Ohio's HB 636 is currently enrolled and awaiting the governor's signature.

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 excludes used, recycled, alternative, aftermarket, and third-party replacement parts from any Tesla warranty coverage, 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 H.B. 119 requires insurers to disclose part types in policy documents and repair estimates, with repair-estimate rules effective May 6, 2026 and insurer notice rules for policies issued or renewed on or after October 1, 2026. Ohio's HB 636 would give policyholders the explicit right to choose OEM parts if they pay the price difference, and as of August 2026 the enrolled bill is awaiting gubernatorial action.

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 have proprietary battery, propulsion, and high-voltage electrical systems that require 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.