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What Is OEM Coverage?
Original equipment manufacturer (OEM) coverage guarantees original parts for covered repairs. OEM costs about $15 a year, but it’s not offered by all companies.
Written by Bonnie Stinson
Edited by Amy Bobinger
Original Equipment Manufacturer (OEM) coverage is an optional add-on to your standard
auto insurance policy
. It’s also called Original Parts Replacement coverage, and you can buy it from your insurance company if they offer it. What is OEM coverage?
The OEM endorsement ensures that any repairs made to your vehicle (except tires) will use parts manufactured by the original maker of your car. Unlike aftermarket parts, OEM parts are specifically designed for your vehicle, maintaining its integrity and performance.
With a basic policy and no OEM coverage, companies have no obligation to use original parts or cover OEM parts to repair your vehicle.
OEM coverage is different from an OEM warranty, which is provided by the manufacturer. For instance,
Ford Insure
is a program offered directly by Ford and it gives access to a certified collision network and OEM Ford parts (plus other perks).Be warned: Some companies use language that misguides policyholders to think they have OEM coverage. Read your policy carefully and clarify with an insurance agent that you actually have OEM coverage.
How does OEM coverage work?
You buy OEM coverage from your insurer as an add-on to your base car insurance policy.
If you have OEM coverage, your insurance company will pay for the cost of OEM auto parts if your vehicle is in the shop for a covered repair. Here’s how it works:
- File a claim: As soon as possible after an accident, contact your insurance company and start the process offiling a claimfor the damages.
- Get a quote: The repair shop will issue a quote for your repairs, which your auto insurance company must approve. Not all states require repair shops to indicate whether parts will be OEM or aftermarket, so make sure to verify that OEM parts are included before you submit a quote.
- Take your car in for repairs: With OEM insurance coverage, your car is restored using the same components it had when it rolled off the assembly line.
- Complete your claim: Once the repairs are completed, your insurance company will reimburse the garage for the repair—OEM parts included.
What if I want OEM parts and don’t have OEM coverage?
Without OEM coverage, you’ll have to check whether your policy will cover the original equipment. Your base auto policy may not specifically require auto repairs to use OEM parts. Most will only cover aftermarket products to help save money.
If your insurance policy doesn’t cover OEM parts, you may still be able to request them from your mechanic. However, you’ll likely be responsible for paying the difference between the OEM parts and their aftermarket equivalent.
OEM vs. aftermarket parts—and why it matters
Although many aftermarket parts are comparable to OEM standards, there are some differences that may affect your decision about which to use on your vehicle.
1. OEM parts are always new.
OEM parts come straight from the manufacturer with a specific part number that matches your vehicle. Aftermarket parts may come new from the factory, but some exterior elements like door panels and fenders may be salvaged and refurbished from a crashed vehicle.
2. OEM parts are always regulated for quality.
OEM parts must be manufactured to very rigorous standards. Aftermarket quality can vary, even with new products. That said, some aftermarket parts are certified by
CAPA
(Certified Automotive Parts Association), which verifies that the parts meet or exceed the standard of the OEM part they’re replacing.
Studies by the Insurance Institute for Highway Safety (IIHS) found no significant variations in performance for CAPA-certified non-OEM parts.
Studies by the
Insurance Institute for Highway Safety (IIHS)
found no significant variations in performance for CAPA-certified non-OEM parts.3. OEM parts are usually more expensive.
OEM parts use the same high-quality materials and design as the original vehicle, so they typically cost about
60%
more than aftermarket shops, according to the Property Casualty Insurers Association of America (PCI1). Aftermarket parts tend to cost less because they don’t have brand recognition—although in some cases, the use of inferior materials helps drive the price down.Widely available aftermarket parts have helped force down the cost of OEM parts, according to the Insurance Information Institute (III).
Widely available aftermarket parts have helped force down the cost of OEM parts, according to the
Insurance Information Institute (III)
.4. Aftermarket parts could void your warranty.
OEM parts come with warranties that require the manufacturer to replace or repair a damaged part under certain conditions. Your warranty deal may also include cheap or free work at a dealership.
Aftermarket parts do not usually carry warranties, and some aftermarket products and modifications may even void the manufacturer’s original warranty coverage. Manufacturers like Ford and Honda recommend that genuine parts be used in repairs.
5. OEM parts may take longer to obtain and install, delaying vehicle repairs.
Repairs can take longer with OEM coverage, according to J.D. Power2. That’s because OEM parts have to be ordered and shipped from the manufacturer, whereas aftermarket parts can be sourced faster.
6. OEM parts are usually more highly valued by future buyers.
If you plan to resell your car in the future, aftermarket parts may decrease its resale value, according to Kelley Blue Book3. OEM parts shouldn’t affect the resale value.
Who is eligible for OEM coverage?
Newer cars with comprehensive and collision coverage may be eligible for OEM coverage.
- Vehicle age: Eligible if model is newer than 10 years (7 years for some companies)
- Existing coverage: Eligible to add OEM with current full coverage policy
Exceeding mileage limits might exclude you from OEM eligibility.
Companies that offer OEM insurance coverage
Here are a few companies that do offer OEM coverage as an optional add-on to your policy:
Carrier | Offers OEM coverage? |
|---|---|
American Family | Yes, for vehicles less than 8 years old4 |
Yes, to vehicles 10 years old or newer if you have full coverage5 | |
Chubb | Yes, automatically included in Masterpiece Auto Coverage6 |
Yes, if you have full coverage7 | |
AIG | Yes, as an optional coverage8 |
Only for motorcycles9 | |
No, but they do offer customer choice for OEM vs. aftermarket10 | |
Yes, as an optional coverage11 |
You may be surprised to find that not every major insurer offers OEM coverage. For instance,
GEICO
doesn’t offer an OEM option at all. And State Farm
does not offer OEM coverage, but they do offer a satisfaction guarantee and only use CAPA- or NSF- certified parts12. Laws on OEM coverage
35 states have laws that protect drivers by regulating non-OEM parts.
- 31 states require repairers to disclose non-OEM part usage in repair estimates.
- 20 states require repairers to disclose the non-OEM part manufacturer.
- 13 states require that non-OEM parts perform to the same level as OEM parts.
- 6 states require that the driver provide consent for non-OEM parts.
At a federal level, you’re protected by the
Magnuson-Moss Warranty Act
. This allows you to choose replacement parts without voiding your warranty so long as those parts meet the manufacturer’s specifications.Who should get OEM coverage?
OEM coverage is especially beneficial for these drivers of newer, more expensive cars, although frequent drivers and some classic car owners may benefit from this coverage as well.
OEM coverage may not be necessary, cost-effective, or even available for older or less valuable vehicles.
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FAQ
Why does OEM insurance only cover parts for cars seven years old and under?
The older a car gets, the more difficult it is for mechanics to locate OEM parts that are compatible with the model year of the vehicle in need of repair. To make sure that OEM parts are available, only newer cars are eligible for OEM insurance.
Can I request OEM parts be used if I don’t have OEM coverage?
Yes. But if your insurance company is paying for the repairs you will likely be responsible for the extra cost of the OEM components—many insurance companies will only cover aftermarket replacement parts if you don’t have OEM coverage.
Meet our experts
Bonnie Stinson
Bonnie Stinson is an insurance writer with 8+ years of experience as a content writer. They specialize in making complex topics like insurance and technology easy to understand. Bonnie has written over 1,300 articles to help people become confident car owners, from how to choose the right car and build a car insurance policy to dealing with stressful situations like car accidents and unexpected repairs.
Before joining Jerry’s editorial team, Bonnie worked as a digital media strategist and user experience researcher, producing content for Furnishr, STACKEDD Magazine, InfinityCore Health, and the global non-profit Giraffe Heroes.
Amy Bobinger
Licensed Insurance Agent — Expert Insurance Editor
Expert insurance writer and editor Amy Bobinger specializes in car repair, car maintenance, and car insurance. Amy is passionate about creating content that helps consumers navigate challenges related to car ownership and achieve financial success in areas relating to cars.
Amy has over 10 years of writing and editing experience. After several years as a freelance writer, Amy spent four years as an editing fellow at WikiHow, where she co-authored over 600 articles on topics including car maintenance and home ownership. Since joining Jerry’s editorial team in 2022, Amy has edited over 2,500 articles on car insurance, state driving laws, and car repair and maintenance.
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