House of Representatives

SB 1350

original equipment manufacturer parts; notice

Sponsors: Cirillo

 

X

Committee on Banking and Insurance

 

Caucus and COW

 

 

As Passed the House

 

SB 1350 requires motor vehicle liability insurance policies to include notice that the insured is required to pay the difference in cost between original equipment manufacturer (OEM) parts and aftermarket crash parts.

 

History

Aftermarket crash parts may comprise OEM and non-OEM parts but typically refer to non-OEM parts. Non-OEM parts are manufactured by entities other than the manufacturer of the vehicle. Aftermarket crash parts may be less expensive than OEM parts. Currently, Arizona insurers and body-shop providers are required to disclose the use of non-OEM parts at the time of repair.

 

Provisions

·                      Requires motor vehicle liability insurers that provide coverage for first party property damage losses and that pay claims based on the cost of aftermarket crash parts or that require the insured to pay the difference between OEM parts and the cost of aftermarket crash parts.

 

·                      Specifies that the notice requirement be approved by the Director of the Department of Insurance and shall include language that reflects the insurer’s practices. The notice must explain that the insured may be required to pay the difference between OEM parts and aftermarket crash parts and that any warranties on the aftermarket crash parts are provided by the manufacturer of the parts rather than by the vehicle manufacturer.

 

·                      Allows the insurer to provide notice on a separate form or on the declaration page of the policy.

 

·                      Requires the notice be included in all policies issued or renewed after December 31, 2000.

 

·                      Stipulates that insurers must provide notice at the time of application or at the time the insured pays for the policy or executes a monthly premium payment plan.

 

·                      Requires the insurer to pay for the cost of OEM parts if the insurer determines that aftermarket crash parts are not available.

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·                      44th Legislature                                                                                   Analyst Initials _______

·                      Second Regular Session                                                                               February 28, 2000

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