What’s the difference between OEM and aftermarket parts in insurance claims?

OEM parts are produced by the same company that made your vehicle, and are practically identical to your car’s original parts. Conversely, aftermarket parts are made by third-party companies that aren’t affiliated with the automaker.

Generally, insurance companies tend to default to aftermarket parts because they’re more cost-effective than OEM parts. In some cases, choosing aftermarket parts can prevent vehicles from being declared as total losses. More often than not, you’ll have to pay the difference to get an OEM part, unless you have OEM coverage on your policy.

OEM parts are often believed to be better than aftermarket parts, and some retailers will even go as far as to brand these parts as “genuine” to emphasize their superiority. But the truth is, neither part is necessarily “better” than the other. Each comes with its advantages and disadvantages, and the right pick for you will depend on your budget and needs.

In most insurance claims, the repair shop typically sources your replacement parts, eliminating the guesswork. Still, according to the III (Insurance Information Institute), it’s within your rights to request an OEM part from the repair shop if desired, although you may be required to pay the difference. No matter what route you choose, it’s always a good idea to have an understanding of the pros and cons before any parts are installed:

Aftermarket modifications are parts you’ve had installed yourself. Typically, if you have comprehensive or collision coverage, aftermarket modifications that increase safety, like backup cameras or anti-theft devices, are covered up to a predetermined limit that’s unique to your insurance policy. Usually, this ranges from $1,000 to $3,000, and the eligibility will depend on the type of modification⁴.

Cosmetic and certain DIY modifications are usually not covered by insurance. Some examples of aftermarket modifications that aren’t usually covered include:

• Dark tinting
• Altered/homemade suspension
• Snow plowing equipment
• Custom rims

While there isn’t a clear “winner” between OEM and aftermarket parts, insurance will generally opt for aftermarket parts in your car repair to lower their total costs. In most cases, well-sourced aftermarket parts are of comparable quality to OEM. If OEM parts are what you desire, add OEM coverage to your auto insurance policy. If you’ve already filed a claim, consider contacting your insurance company directly to appeal their decision, review your state laws, and contact an attorney if all other options have been exhausted.