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South Carolina Among States Considering Restrictions on Aftermarket Parts Usage in Auto Collision Repair

According to an A.M. Best BestWire report, South Carolina is one of about 25 states that could see legislation introduced in 2002 to restrict the use of aftermarket parts in auto collision repairs.

Among the provisions of the South Carolina bill, SB 831, is a requirement that motor-vehicle repair facilities using aftermarket parts provide a warranty equal to that for the original parts. According to Kirk Hansen, the Alliance of American Insurers' director of claims, auto-repair facilities would also have to disclose how using aftermarket parts affects the existing warranty on the motor vehicle, he said. SB 831 is confusing, Hansen said, because it suggests the use of a generic part can void warranties of automobiles, which isn't true. The bill discriminates against generic parts by making them meet a higher burden of proof than those made by car manufacturers, Hansen said. Hansen warned that using aftermarket parts will be more difficult for repair shops under this bill, which in turn will increase the cost of repairs and eventually mean higher premiums for South Carolina residents.

Annually, the alliance rebuilds a car with original equipment manufacturer, or OEM, crash parts and compares the cost with that for generic parts. The latest study showed using OEM costs four times as much (BestWire, Nov. 1, 2001). Independent overseas manufacturers, the same ones that make generic parts, typically manufacture car company parts, and the quality of generic parts have been proven time and again in "blind fit" parts demonstrations, he said. After an Illinois jury ruled against State Farm in October 1999, saying the company was guilty of consumer fraud and breach of contract for using non-OEM parts, the insurance industry has been battling state legislatures to preserve the right to use the parts. More attempts to restrict the use of aftermarket parts are expected in state legislative sessions for 2002 than in the previous year, Hansen said. "One of the body repair trade groups has identified this as a key issue. In the last session, they were waiting to see what happened. This year they will be pushing legislation," Hansen said.

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