Newport News | Gloucester Auto Accident Lawyers
LAWYERS SERVING INJURED PERSONS
hero_pattern.png

News

Firm Announcements and Law Updates

Property Damage - Can They Use Recycled Parts?!

Why Aren’t They Using OEM Parts?

Accident Repairs and OEM Parts

Accident Repairs and OEM Parts

Recently had a client who had a property damage question regarding the insurance company wanting to repair her vehicle with “used” parts. The SUV was in great condition, but was over ten years old and would not be considered a “collectible.” It was just a nice, reliable vehicle that she had taken great care of over the years. The client wanted the insurance company to pay for new original equipment manufacturer (“OEM”) parts - especially for the bumper and rear quarter panels.

What does Virginia law say about “parts?”

There are few reported Virginia cases that discuss replacement parts in property damage claims. The cases (mostly fire insurance claims) discuss the remedy available as being the cost of repairing or replacing the damaged property with material of “like kind and quality.” Standard language in Virginia approved insurance policies use this same exact language: “of like kind and quality (‘LKQ’).”

But what is “of like kind and quality?” The Virginia Supreme Court describes it as bringing the car back to its “pre-loss condition.” The court said, “the measure of damages for personal property that has been damaged, but not destroyed is the difference between the market value of the property immediately before and immediately after the property was damaged. An exception to the rule is that where property can be restored by repairs and the repairs would be less than the diminution in value because of the injury, the amount recoverable is the reasonable cost of restoring the property to its former condition”. Norview Cars, Inc. v. Crews, 208 Va. 148 (1967)(emphasis added).

Note how the Court did not define “former condition” or describe how one is to get the vehicle back to its “former condition.” This is the difficult question for vehicle repairs and depends on the age of the vehicle involved in the accident. Generally, LKQ parts are usually “salvage” parts for vehicles more than a couple of years old. There are no hard and fast dates for when a vehicle passes in age from repairs using OEM to LKQ parts; but, usually depends on the cost differences in those parts. If using OEM parts pushes the cost of repair above 75% of the actual cash value of the vehicle, the insurance company may total your vehicle. Sometimes using LKQ parts to repair the vehicle may result in your vehicle being repaired. For many of our clients, the thought of having to buy a “new” vehicle with the actual cash value paid to them is a bad deal. Of course, the total loss payment is only supposed to pay you enough to pay for a similar replacement vehicle.

Virginia Personal Automobile Policies - What do they say about repair parts?

The Virginia standard personal auto policy contains a limit of liability that describes what an insurance company will pay in a property damage case:

A. Their limit of liability for loss will be the lesser of the:
1. Actual cash value of the damaged property (a/k/a “totaled vehicle”); or
2. Amount necessary to repair or replace the property with other property of like kind and quality.

What about if I use my collision coverage instead of going through the negligent party’s liability coverage?

The approved Virginia insurance policy for collision or comprehensive coverages also contains a “limits of liability” for loss clause. It states that the company’s limits are the lesser of the “amount necessary to repair or replace the property with other property of like kind and quality.”

So in either instance, the insurance coverages have the same limitations on liability although you may be able to work more closely with your own insurance company under your collision coverage to achieve better repair results with OEM parts.

What if I “demand” that OEM parts be used by the repair facility?

The Virginia Personal Automobile Policy form contains a limiting clause on what an insurance company must pay for repairs. The clause states that, “if a repair or replacement results in better than like kind or quality, they will not pay for the betterment.” So, you can demand that the repair facility use OEM parts. Be aware that the insurance company can escape paying for more expensive parts under this clause and you’ll be stuck with the “betterment” cost over the cost of a recycled or replacement part.

Conclusion

In most instances, if a vehicle is more than a couple years old, the insurance company is going to look to “replacement parts of like kind and quality” to repair your vehicle. If you’re insistent on having OEM parts used, you may have the option to pay the repair shop the difference between recycled and OEM parts to be used in the repair. Otherwise, your only recourse is proving in a court that the recycled parts are not of like kind and quality and that the use of them does not return your vehicle to its former condition. This type of claim would require expert testimony from mechanics and probably not worth the cost difference between the recycled and OEM parts. Instead, depending on the value of your vehicle, it may be worthwhile pursuing a diminution in value claim.

Rhett Video Graphic 001-left.png

Rhett B. Franklin, Esq.

About Rhett B. Franklin, Esq.

Rhett is celebrating his 25th year in the practice of law. He has worked as a personal injury, auto accident and workers’ compensation trial attorney, an adjunct professor and law lecturer. He enjoys working on interesting theories of liability and is dedicated to working to achieve the best results for his clients against insurance companies.