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It's a dance as predictable and ritualistic as the
change of seasons: The new year arrives, lawmakers and lobbyists return to work, and the persistent struggle
over proposed state legislation begins.
Insurance industry lobbyists are no doubt working
overtime this legislative session thanks, in part, to proposed legislation in 13 states that will alter the
rules about the use and disclosing the use of aftermarket car parts in vehicle repairs.
Arizona, California, Delaware, Georgia, Iowa,
Massachusetts, Mississippi, New Jersey, New York, Rhode Island, South Carolina, Washington, and Wisconsin
all have proposed legislation that would "ban, restrict, or otherwise define the use of auto body
replacement parts," according to the National Association of Independent Insurers (NAII), an industry
group that is lobbying for the use of aftermarket parts.
Furthermore, an October 1999 State Farm auto-parts
trial verdict continues to resonate. Aftermarket crash parts sheet metal parts such as hoods, bumpers,
and fenders were thrust onto the national stage when State Farm Mutual Automobile Insurance Co. was
ordered by a Marion, Ill., judge and jury to pay $1.2 billion because it failed to tell its policyholders
about the use of aftermarket parts in auto repairs, violating the state's consumer fraud laws.
Forty states have some kind of law on the books that
dictate to insurers and auto body shops when and where they must disclose the use of aftermarket parts to
their customers. (Alaska, Delaware, Maine, Montana, Nevada, New Mexico, North Dakota, Pennsylvania, South
Carolina, and Vermont currently do not have aftermarket parts legislation.) Arkansas, Hawaii,
Indiana, Ohio, Oregon, Rhode Island, Texas, and Wyoming require a consumer's consent for an aftermarket part
to be used in the repair of their vehicle.
But with many major auto insurance companies, such
as Farmers Insurance Group, MetLife Auto & Home, Nationwide Mutual Insurance Co., Travelers Insurance
Co., and State Farm vowing to not use aftermarket parts in the repair of their policyholders' vehicles
anyway, what do the aftermarket parts laws mean?
For starters, not every insurance company has sworn
off aftermarket crash parts. Allstate Insurance Co. and Progressive Insurance Co., for example, are still
using aftermarket parts in vehicle repairs. Those two companies are the No. 2 and No. 12 auto insurers in
the country, respectively, which makes aftermarket parts legislation germane to a good portion of the
nation's drivers.
"One of our major concerns is that people won't
be informed about what happens when they have a claim," says Bob Hunter, director of insurance for the
Consumer Federation of America. Hunter says that consumers should know their state laws and what to expect
from their insurance policies in order to avoid confusion at claim time.
Use the tool below to find the laws in your state
regarding disclosure of the use of aftermarket crash parts in repairs.
| Most states require
insurers and body shops to disclose to consumers the use of aftermarket auto parts
often referred to as a non-Original Equipment Manufacturer (OEM) parts. Search for
your state's rules or find states that use certain regulations. |
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