A recent ruling by California’s Office of Administrative Law has mandated that insurers must underwrite the cost of replacement parts that are at least equal to the original equipment manufacturer’s part, according to press information received by Bodyshop magazine supplied by the aftermarket parts manufacturer Diamond Standard.
California Insurance Commissioner Dave Jones announced on January 4, 2013 that the Office of Administrative Law has amended regulations submitted by the California Department of Insurance (CDI) regarding the use of aftermarket crash parts, which are expected to become effective on January 30, 2013 with compliance required on March 30, 2013.
Specifically, the new regulations set forth that:
* no insurer shall require the use of non-original equipment manufacturer replacement crash parts in the repair of an automobile unless all of the following conditions are met:
* the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance (compliant part)
* the insurer warrants that such parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance and disclose this in writing, in any estimate prepared by or for the insurer
* the insurer specifying the use of non-original manufacturer parts shall pay the cost of any modifications to the parts that may become necessary to effect the repair
* all original and non-original manufacturer parts, manufactured after the effective date of this subdivision when supplied by repair shops shall carry sufficient permanent, non-removable identification so as to identify the manufacturer; accessible to the greatest extent possible after installation (compliant part)
* if an insurer specifying use of non-original parts has knowledge that a part is not equal to the original part in terms of kind, quality, safety, fit and performance or does not otherwise comply it shall immediately cease requiring use of the part and shall, within thirty (30) days, notify the distributor of the non-compliant aspects
* insurer shall pay the cost associated with returning the non-compliant part and the cost to remove and replace the non-original equipment with a compliant nonoriginal or original equipment part.
The new regulations were sought to further protect California consumers from physical and financial harm caused by defective or non-compliant aftermarket parts which continue to infiltrate the repair process; the substantial costs borne by automobile repair shops and their customers associated with installing defective or poorly fitting parts, while enhancing insurer accountability in the claims process.
“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,” Commissioner Jones stated.