"An Act relating to insurance for and work on certain motor vehicle repairs; and providing for an effective date."

There are many types of replacement parts used to repair collision-damage to a motor vehicle. "Original equipment manufacturer" (OEM) parts are developed by the original manufacturer of the motor vehicle, and are designed to meet particular fit, finish, function, and corrosion resistance specifications. Non-OEM (also called "aftermarket") crash parts are reverse engineered to replicate the original. While some non-OEM (aftermarket) parts are a comparable low cost alternative to the OEM parts manufactured and distributed by the vehicle's manufacturer, professionals have found others to be inferior to OEM parts in terms of fit, finish, and quality.

The use of non-OEM parts in the repair of a new vehicle can affect the vehicle's resale value, the manufacturer's warranty, and the vehicle's safety. In some instances, insurance companies have required the use of non-OEM parts in order to save money. State Farm was found liable in a class action suit filed in the State of Illinois for violating its contract with policy holders. The court determined that by mandating the use of aftermarket parts State Farm violated its contract to return the damaged cars to pre-accident condition. 13,000 Alaskans were involved in the class action suit.

I am concerned that many Alaskans are not aware of the use of aftermarket parts in their vehicles' repair, or the effect the use of non-OEM parts can have on their vehicle. Manufacturers claim that their limited warranties cannot cover a non-OEM part, or adjoining parts caused to fail by these parts. Non-OEM parts can also diminish a vehicle's resale value. General Motors found an average reduction in the resale value of a car repaired with imitation parts of $740.

HB 99 requires a consumer's consent to the use of a non-OEM part. If a consumer consents to the use of a non-OEM part insurers must provide a warranty for the non-OEM part. Consumers have a reasonable expectation that their insurance will cover the repair and restoration of their vehicle to the condition it was in before the accident. I also believe that consumers expect those repairs will not jeopardize their vehicle's warranty. HB 99 ensures consumers' reasonable expectations will be met, and their warranties protected.

Last Updated: 03/19/2003

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