Skip to main content

OEM Insurance 101 – Don’t Get Schooled Without This Coverage

By May 19, 2022No Comments

OEM Insurance 101

Now let’s be clear, we are not trying to sell you anything here.  But we want you to be informed when you are shopping for car insurance.  And that means understanding the coverage available to you.  And in this case, OEM is one endorsement that you really need to consider.

OEM stands for Original Equipment Manufacturer. And OEM Insurance is not typically standard with an auto insurance policy.  You must ask for this coverage or hopefully, your insurance agent is paying attention to your vehicles and making the right recommendations. 

It is typically an endorsement added to your auto policy and will come in very handy if you are in an accident.  But to understand this, let’s explore the type of parts that might be used in the repair.

  1. Aftermarket parts are components that aren’t manufactured by the company that manufactures your car. You are in an accident in your Mercedes – the aftermarket parts used in the repair aren’t Mercedes.
  2. OEM parts are designed specifically for your car by the manufacturer. If you are in an accident in your Jeep Grand Cherokee, the auto parts used are from Jeep.
  3. Used OEM parts could be used if aftermarket options don’t exist.

At first glance, you might not really care.  Most people don’t even realize that this is an option.  As long as it gets fixed and the car runs, so what?  Think about it, and here’s why you should consider OEM parts:

  1. You can rest easy since you know that your car is being restored to its factory condition
  2. The body/repair shop will be obligated to acquire OEM parts and they are better quality
  3. The warranty on your car could be voided by not using OEM parts in a repair
  4. OEM parts can come with their own warranty (aftermarket parts generally do not)
  5. Resale (or trade-in value) of your car may hold its value better if any damage was repaired using OEM parts

Here are some common questions about OEM parts and OEM Insurance:

  1. Do all auto insurance companies offer OEM Insurance?

Believe it or not no.  Some don’t offer it at all.  And in this case, if you had an accident and insisted on OEM parts, you would have to pay the price difference out of pocket above and beyond the cost of aftermarket parts.  So, check your policy, and if you want this coverage ask your agent to shop rates and coverage.  They can certainly break down the cost of the endorsement for you.

  1. If OEM parts aren’t available, how is my claim settled and the car repaired?

Currently, we are in a supply-chain mess, and it is possible that there aren’t OEM parts readily available.  Or, the lag time means your car could be in the shop for weeks – most people can’t live like that and your rental car coverage could run out.  So, if OEM parts are exhausted then it could mean a used OEM part or aftermarket parts.  But if you have the OEM endorsement, the intent is to use OEM parts.

  1. What are the restrictions on OEM insurance?

There are.  Most carriers will only consider OEM coverage for cars that are zero to seven or eight years old.  The reason is that most OEM parts are phased out by manufacturers as the cars get older.  An OEM part for a car that was manufactured nine or ten years ago is very difficult to find.

And your vehicle must carry comprehensive and collision coverage to qualify.  Some would accept comprehensive only but that does little good if you have a collision claim.  If you want OEM, then carry comprehensive and collision coverage so you know that you would be covered regardless of the nature of the claim.

  1. Are there any auto parts that would not be covered by OEM?

Now this will vary by carrier, but one of the more common parts that can be excluded is tires.  The amount of wear and tear on them is an issue for many carriers but check the policy language for any exclusions to the endorsement.  Your agent should be able to present you with a copy of the language and any exclusions would be laid out for you to see.

OEM insurance is just one of many endorsements that can add value to your auto insurance.  Consult with your agent to determine if OEM Insurance is right for you.  And as always, we are available to review your current coverage and address your concerns.  You can book a time to speak with us at or call us any time at 513-444-2100.

Skip to content