DOVER, Del.-The first state to sign the U.S. Constitution is again striving to be among the country's pathfinders. Delaware joins 20 other states that have proposed bills this year to regulate the use of aftermarket replacement parts.
Introduced by Sen. David P. Sokola, Senate Bill 310 would prohibit insurers from requiring repairers and vehicle owners to install non-original-equipment-manufacturer (non-OEM) parts on vehicles still covered by factory and extended warranties. The proposal would also forbid insurers from directing policyholders and claimants to specific glass repair and replacement facilities. "It's one more state moving in the right direction," says Bob Redding, Washington representative for the Automotive Service Association (ASA).
If the bill is passed in its current form, vehicle owners could authorize the use of non-OEM parts, but they would have to give written permission before the work began. Aftermarket parts used would have to equal their OEM counterparts in fit, quality, performance and warranty. "It's one more added to a very small number of states that requires informed written consent by the insured, and that's what's critical," Redding says. "I didn't know until I looked that I had to use replacement crash parts if the insurer wanted me to. You just don't realize what you're signing up for. You're looking at that premium cost."
Although the bill originally encompassed collision and mechanical replacement parts, Sokola introduced an amendment to strike mechanical parts from the legislation. That segment of the industry doesn't support regulation efforts on its behalf because problems with mechanical replacement parts are not as commonplace as they are in the collision industry, Redding says.
Benefits from a regulatory law would extend beyond claims negotiations and repair jobs. Aftermarket governing would force shop owners to become educators who must inform consumers of their repair rights and options, thereby enhancing the image of the collision repair industry. "For the first time, shop owners [would] be put in the position of supplying information and education to the consumer about the repair," Redding says. "It's an increased educator role and puts us more in the position of informing the consumer and teaching the consumer, and I think it will heighten our image." For consumers, the knowledge they take from one educational repair experience will assist them the next time they are involved in an accident, when they change insurance companies or when a move takes them to another state or region.
Sokola introduced the legislation at the request of a constituent, basing the piece on a model bill and adapting it to Delaware. "We want it to be a consumer information and consumer choice issue," he says. "I think a consumer ought to know the difference ... The parts by federal law still do have to be honored as far as warranty, but the warranty is one thing and inconvenience is another. If you have a part under warranty but have to keep going back because of fit or finish problems, you're inconvenienced."
As of press time, the bill was in the Senate Judiciary committee. The senator is hoping to set a date soon for a committee hearing. He explains that the proposal has been buried beneath a host of educational issues stirring in the state, which dominated most of the legislators' time. When the issue finally reaches hearing status, Sokola expects organized opposition from the state's insurance industry.
Protests from Insurers
The Alliance of American Insurers (AAI) could be among those protesting. AAI dislikes parts regulation legislation, says Kirk Hansen, director of claims for the Schaumburg, III.-based group. Instead of supporting the use of factory parts, the association promotes the use of parts approved by the Certified Automotive Parts Association (CAPA).
"Factory parts are three times more expensive than CAPA parts, and when a CAPA part comes out, all of a sudden the manufacturer reduces the [factory part] price," Hansen says. For example, a 1997 Ford that sold for about $18,985 last year would cost more than $72,250 if built from OEM parts, the association says.
"It's kind of like supply and demand," he adds. "When there's competition, it brings down the price of even the factory parts. That benefits everybody. Even if you don't use aftermarket parts, to prohibit their use is to drive up the cost for everybody." -By Angi Semler
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