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Car insurers pushing cheap repair work?

By Associated Press

Many insurers push "shoddy" and even dangerous knockoff replacement parts on car owners after a crash, according to a study in Consumer Reports magazine. The study, in the magazine's February issue, found replacement bumpers that crumpled with little resistance, poorly fitting fenders prone to rust and hoods with faulty latches that allow them to open at high speeds.

Most insurers endorse imitation parts because they come as much as 65 percent cheaper. Yet customers complain about knockoff parts twice as often, according to a survey of 500 repair shops done for the auto industry by Industrial Marketing Research.

Daniel Della Rova grew concerned over replacement parts after the hood of his Honda Accord flew into his windshield on the highway near Kutztown, Pa., in 1998. A damage appraiser blamed a cheap imitation hood made in Taiwan.

The difference in price can be substantial. A replacement hood for the Accord cost about $100, compared with about $225 for a hood made by Honda. That's a major reason why insurers call for imitation parts 59 percent of the time, Industrial Marketing Research said.

Only one major insurer in 10 requires replacement parts made by the original automaker.

Only one major insurer of 10 questioned by Consumer Reports required replacement parts made by the original automaker: the Interinsurance Exchange of the Automobile Club of Southern California. The magazine said Allstate will pick up the cost for original parts if the customer insists. State Farm, Travelers and Erie require the consumer to make up the difference.

Insurers warn that requiring parts from original equipment makers could drive up the $59 billion Americans spend each year replacing parts damaged in the 35 million auto accidents that occur annually. The insurance industry is not aware of widespread problems with replacement parts, said David Snyder, a lawyer with the American Insurance Association.

Nearly everyone agrees that an open market for replacement parts has helped keep prices down. Yet parts from original automakers remain high. The sum of the parts on a 1998 Ford Explorer is more than two-and-a-half times its $27,145 list price, according to the Alliance of American Insurers.

Consumers Union, a nonprofit group that publishes the magazine, wants Congress to require the National Highway Traffic Safety Administration to require labeling that would allow authorities to track parts for recalls and to determine legal liability. It also wants states to require insurers to disclose how much they're saving with imitation parts.

Last updated Jan. 26, 1999


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