Jury rejects use of knock-off parts in cars
The question "what does it cost to replace a fender" may now be easier to answer.
A landmark court ruling this week - the largest ever against an insurance company - is expected to discourage the use of "imitation" replacement parts in post-accident auto repair.
In ordering State Farm, the nation's largest auto insurer, to pay $456 million to its policyholders, a jury in Illinois decided it was wrong of the company to require installation of imitation parts, rather than pricier original parts from the auto manufacturer who made the car.
While the verdict is likely to improve America's rolling stock, the insurance industry and some consumer groups say it may also have the long-term effect of raising insurance rates.
They argue that use of substitute parts, often called "after-market parts," saves money in repairs, holding down insurance costs and premiums consumers pay. Indeed, after-market parts - made primarily in overseas factories that use original-equipment sheet metal as a template in lieu of actual factory specifications - cost considerably less than manufacturer-minted parts.
"This verdict is a major setback for ... policyholders and consumers in general, because there will be a move toward a monopoly on parts for the automakers," says State Farm spokesman Phil Supple. State Farm vows to appeal the ruling.
But the quality of after-market parts remains in contention - and that debate is what ultimately swayed the jury.
A Consumer Reports study, published in February, tested after-market bumpers, hoods, fenders, and doors. It found many were made of inferior materials, provided less strength against future crashes, rusted more quickly, and in most cases fit poorly.
After-market parts "may do the job," says John Paul, a safety expert at the American Automobile Association. "The car may go back together right, but the next time you get in an accident, they may not provide the protection the original part would have."
Laborers on the front lines of auto repair also report problems with the parts. "They don't fit, they don't weigh the same," says Joe Ciampa, who owns a body shop in Malden, Mass. Two-thirds of the time, he says, the parts need to be modified to fit, adding to labor costs.
Meanwhile, the judge in the Illinois case has yet to decide if State Farm's generic-parts requirement constitutes fraud, a finding that could tack on millions of dollars more to the award.
(c) Copyright 1999. The Christian Science Publishing Society