Use of After-Market Parts in Vehicle Repair

BRIAN SANDOVAL Governor STATE OF NEVADA BRUCE H. BRESLOW Director [LOGO] BARBARA D. RICHARDSON Commissioner # DEPARTMENT OF BUSINESS AND INDUSTRY DIVISION OF INSURANCE 1818 East College Pkwy., Suite 103 Carson City, Nevada 89706 (775) 687-0700 • Fax (775) 687-0787 Website: doi.nv.gov E-mail: insinfo@doi.nv.gov Bulletin No. 16-005 July 22, 2016 # USE OF AFTER-MARKET PARTS IN VEHICLE REPAIR This bulletin serves as a reminder to insurers of the standards that must be adhered to for motor vehicle liability and physical damage claims involving the repair of a vehicle, specifically the use of parts not manufactured for or by the original manufacturer of the vehicle being repaired (non-OEM parts). NRS 686A.310(1)(e) requires the insurer to effectuate prompt, fair, and equitable settlements of claims when the liability of the insurer is reasonably clear. This can be accomplished using non-OEM parts, but only if the repairs adhere to the following standards: - The vehicle must be restored to its pre-loss condition. The non-OEM parts must be warranted to be of like kind and quality. - Pursuant to NAC 686A.240, the insurer must disclose that the repair estimate is based on the use of non-OEM parts. The disclosure must be attached to the repair estimate, be printed in not less than 10-point type, and include the following statement: THIS ESTIMATE IS BASED ON THE USE OF BODY PARTS FOR YOUR MOTOR VEHICLE WHICH WERE NOT MANUFACTURED FOR OR BY THE ORIGINAL MANUFACTURER OF THE MOTOR VEHICLE. ANY WARRANTIES PROVIDED FOR THESE BODY PARTS ARE PROVIDED BY THE MANUFACTURER OR DISTRIBUTOR OF THESE PARTS, NOT BY THE MANUFACTURER OF YOUR MOTOR VEHICLE. PLEASE CONTACT YOUR INSURER TO DETERMINE YOUR RIGHTS REGARDING THE USE OF SUCH BODY PARTS. - Pursuant to NAC 487.170, the body shop must provide a written statement to the claimant identifying each non-OEM part and its origin, inform the claimant in writing that any warranties applicable to the non-OEM part are provided by the manufacturer of the part and not the manufacturer of the vehicle, and obtain the written consent of the claimant to use the non-OEM part. - Pursuant to NRS 487.688, the body shop or garage must perform the repairs in accordance with any specifications of the manufacturer. - Finally, pursuant to NRS 487.520(2), any safety equipment must be repaired or replaced to the standards published and commonly applied in the motor vehicle repair industry. If an insurer does not provide the required disclosures or refuses to authorize repairs in accordance with manufacture specifications and/or repair-industry standards, the insurer is engaging in unfair claims-settlement practices as defined in NRS 686A.310. BARBARA D. RICHARDSON Commissioner of Insurance