Friday, December 13, 2013

Aftermarket Insurance: The Low Down

Insurance companies, just like everybody else, are always looking to save money. Whenever we have to make repairs, we have the choice of choosing generic or aftermarket products instead of purchasing parts and spares made by the original equipment manufacturer (OEM). OEM parts are generally more expensive.

However, before making such a decision, which will probably be made for purely short term gains, you should check if the insurance coverage in the car’s insurance policy will change. In the event that either you or your mechanics choose to install aftermarket parts or spares, you should notify your insurer, else there is a large chance of the coverage changing on discovery of such changes. Insurance companies do not have to insure after markets or can choose not to insure them, hence they prefer it, as it means they save money.

Of course, there are plenty of very high standard aftermarket parts which can be found which are actually better parts to use in cars. In case the car is pretty old, then there is no choice but to use aftermarket parts so when purchasing used cars from car dealers in St. Louis, make sure you check the parts and see how many of them you will have to change or repair.. Tom Torbjonsen who hosts America’s Car Show says that eighty percent of auto body shops use aftermarket parts. The only problem is consistency, aftermarket parts are sometimes at par with OEM spares, sometimes better and sometimes worse but they can generally be found faster than OEM spares.

It is also correct that aftermarket parts save owners a significant amount of money. The National Association of Mutual Insurance Companies has said that in 2012, aftermarket parts cost 26 to 50 percent less than OEM parts. This difference saves car owners between $1.5 billion to $2.4 billion each year. 

Types of Coverage Available

Let us discuss some of the basic terms of coverage that are available to car owners. There are usually four broad categories of insurance and they are listed below:
  • Bodily Injury (BI) Liability: This sort of coverage pays for medical and legal expenses and judgments going against you where there is an accident that you yourself are responsible for and there has been injury or death of another in the accident. 
  • Property Damage (PD) Liability: In case your car causes damage to the property of other people, this coverage covers the damages that the vehicle causes. This is limited to only property though and such property generally means other cars or someone’s yard, fence, house, etc.. 
  • Collision: This covers the damage to your vehicle from a collision regardless of the person responsible for the collision. This sort of insurance comes with an out-of-pocket deductible before coverage kicks in. 
  • Comprehensive Physical Damage: In case hail, fire, brimstone, theft or vandalism leaves your car damage, then this is the insurance that appears as the night in shining armor. Deductibles also apply for this form of insurance and the insurance payout will be limited to the value of the car before the damage was sustained. 

In almost every state in the United States, licensed drivers are guided by mandate to have auto insurance and liability insurance. There are other types of optional packages such as Medical Payments Insurance that cover the medical bills of you and your fellow passengers after an accident regardless of who’s at fault.

Another of the optional packages is the coverage of aftermarket and performance part called Custom Parts and Equipment (CPE) policy. Therefore, after purchasing a car from a used car dealer in St. Louis, it would be advisable to opt for this sort of insurance package. People who have comprehensive auto insurance or collision insurance are generally provided around $1000 in coverage under CPE. Aftermarket parts are defined by such packages as permanent part that improve the look and the performance of the vehicles but they aren’t installed by the manufacturer themselves.

Nick Jones is an automotive journalist who has been writing about cars and whatever they entail for the past twenty years. Being an avid fan of the world of aftermarket upgrades himself, Nick has always been following the insurance packages that go along with aftermarket parts and also on any special offers offered by car dealers in St. Louis and around the area.

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