When an accident leaves your car needing repair, you’ll want to take it to a trustworthy auto shop or dealership. The accident may have damaged specific components, and it may be necessary to replace those components. There are two main types of replacement components: OEM (original equipment manufacturer) and aftermarket. Regarding auto parts, original equipment manufacturer (OEM) components are your best bet because they are designed and built by the automaker exclusively for your model. You will find this article helpful if you are searching for Finding Cheap Car Insurance in Wisconsin.
What are aftermarket parts?
There are two main categories of auto parts: OEM (original equipment manufacturer) and aftermarket.
OEM components are made by the same company that produced the vehicle. Such components are typically the most costly available.
Non-OEM parts are frequently referred to as “performance” parts. However, these are not aftermarket additions. Typically, these are the least expensive components to purchase. It was predicted that by 2020, the aftermarket industry would be worth over $700 billion.
What is the policy’s stance on replacement aftermarket components?
Your car is not protected with the most basic affordable insurance plan, liability-only. If you hit someone, all you have is legal protection.
You must have collision and comprehensive insurance if you want your automobile repaired or replaced if the damage is too significant. When you strike something with your car, the collision mode repairs the vehicle’s physical damage (or someone who is uninsured hits you). Theft and damage from natural disasters, such as floods, hail, falling items, vandalism, and animal attacks, are covered under all-hazards policies. Upon receiving a total loss determination for your vehicle, you will be compensated equally by both parties. However, your car’s actual cash worth is the amount it would cost to buy a new vehicle comparable to the one you insured.
Auto insurance policies from certain providers will include a nominal amount, usually about $1,000, to cover the cost of aftermarket components. Still, document your photographs’ changes and save all relevant invoices.
Standard warranties do not often cover aftermarket components.
You are not covered if you have installed a large number of aftermarket items without first purchasing additional coverage. As the car insurance payment clears, a set of factory steelies will replace your stolen 22s.
Gap insurance does not cover aftermarket parts for financed vehicles.
How do I get insurance for replacement or aftermarket components?
If you’re under 25 and paying the highest rates you’ll ever see, custom parts and equipment coverage, or CPE for short, is relatively inexpensive. For most drivers, the cost of $5,000 in liability insurance is merely a few dollars a month.
It would help if you had a collision, comprehensive insurance, and purchasing CPE.
Define “agreed-value” or “stated-value” insurance. In what way could this benefit me?
In the event of vehicle theft or write-off, the payout on an agreed-value policy is predetermined at the outset. That’s the sum on which your premium is based.
If you report that your Honda Civic is worth $50,000, the insurance company will issue a check without further negotiation.
Rare or custom-built vehicles, for which a suitable replacement may be impossible to locate, are prime candidates for agreed-value coverage. People who have invested much time and money into making their car a tuner may want to look into this type of insurance.
Your vehicle’s value is set by you, the policyholder, under stated-value insurance. However, you are not insuring the car for its total market value, as you would with agreed-value insurance; instead, you are purchasing only the coverage you can afford. Take the case of a vintage car with a high market value (say, $2 million) and a low budget (say, $1 million in coverage): the owner would receive a stated-value policy. In addition, the insurer could make that payment if the policy’s payout is less than the actual cash value.
To whom do the aftermarket components belong if my auto insurance totals my vehicle?
In most cases, the insurer will foot the bill. It is generally accepted that once your auto insurer gives you a settlement for a totaled car, any custom parts or accessories you had installed remain the insurer’s property.
Talk to your claims adjuster about whether or not you can keep any specialized parts you’ve ordered. You may have to reinstall the factory component, and the monetary value you expect to obtain on the automobile may be reduced. The original stereo may need to be reinstalled if, for instance, you decide to keep your aftermarket stereo system.
Conclusion
Find out if the physical damage coverage you’re considering (such as collision or comprehensive) will cover your unique components and how much it will cost. Examine the cost of an endorsement for special parts and equipment to see if it will affect your premium.
