1. How can an Original Equipment Manufacturer (OEM) prolong the coverage of auto insurance?
Original Equipment Manufacturer (OEM) Coverage in Auto Insurance
When purchasing auto insurance, drivers may come across the term “Original Equipment Manufacturer” or OEM coverage. But what is it? This type of coverage is furnished to help protect the original parts installed on the vehicle by the manufacturer.
What is OEM Coverage?
Original Equipment Manufacturer Coverage helps to pay for damages to parts that are a result of an accident or other covered peril. This coverage is often optional and is priced separately from the policy. In some instances the coverage may come included in an extended warranty.
Benefits of Original Equipment Manufacturer Coverage
There are several benefits to having OEM coverage. Here are some of them:
- Replacement Parts Quality – Original Equipment Parts are made by the same manufacturer who manufactured the vehicle. This increases the likelihood that the part will fit properly and function as it should.
- Repairs that Pass Inspections – Many states have departments specifically designed to conduct periodic inspections on certain types of vehicles such as commercial ones. These inspections may require that certain parts are made by the same Original Equipment Manufacturer.
- Cost – OEM parts often cost less than after-market parts.
Things to Consider when Purchasing OEM Coverage
When purchasing auto insurance, it is important to consider the pros and cons of having Original Equipment Manufacturer coverage. Here are some things to consider:
- Availability – Not all insurers offer this type of coverage. Drivers should make sure their insurer has it available before purchase.
- Cost – OEM parts can be more expensive than after-market parts, so drivers should make sure the cost of coverage outweighs the cost of repair if they decide to purchase it.
- Limits – Insurers place limits on the coverage they provide, so drivers should make sure they understand the limits before they purchase coverage.
Bottom Line
Original Equipment Manufacturer coverage is an optional addition to auto insurance policies. This coverage helps pay for damages to parts that are a result of an accident or other covered peril. While it may cost more than after-market parts, it can be worth the extra cost depending on the situation. Drivers should understand their coverage limits, as well as the availability and cost of coverage before they decide to purchase it.