Utah governor signs bill to require replacement part type use notice in insurance policies
Legislation has been signed into law in Utah that would prohibit the required use of non-OEM aftermarket crash parts in collision repairs without written notice to policyholders, effective May 6.
Gov. Spencer Cox signed the bill on March 18.
HB 119 defines “non-OEM aftermarket crash part” as an aftermarket crash part not made for or by the vehicle manufacturer.
As amended, it also defines an “OEM aftermarket crash part” as an aftermarket crash part made for or by the vehicle manufacturer. “Aftermarket crash part” is defined as “a replacement for any of the nonmechanical sheet metal or plastic parts that generally constitute the exterior of a motor vehicle, including inner and outer panels.”
For policies issued or renewed on or after Oct. 1, 2026, the insurer must provide to the insured a written notice stating that the insurer may authorize or specify the use of aftermarket crash parts in the event of a covered loss.
The notice must state: “In the event of a covered loss, the insurer may authorize or specify the use of aftermarket crash parts supplied by a source other than the manufacturer of your vehicle. Parts used in the repair of your vehicle by a manufacturer other than the original manufacturer are required to be at least equivalent in kind and quality in terms of fit, quality, and performance to the original parts they are replacing.”
The legislation states that the notice is informational only and doesn’t create, expand, or alter coverage or obligations under the policy. It also states that it doesn’t create an express or implied warranty by the insurer beyond the terms of the insurance policy, require an insurer to provide coverage for OEM aftermarket crash parts unless the coverage is expressly provided in the policy, or prohibit the voluntary use of OEM aftermarket crash parts.
When an insurer authorizes or specifies the use of a non-OEM aftermarket crash part, the estimate must state: “This estimate has been prepared based on the authorization of your insurer and the use of aftermarket crash parts supplied by a source other than the not made by the original manufacturer of your motor vehicle. Parts used in the repair of your vehicle that are made by a manufacturer other than the original manufacturer are required to be at least equivalent in kind and quality in terms of fit, quality, and performance. Warranties applicable to these replacement parts are provided by the manufacturer or distributor of these parts rather than the manufacturer of your vehicle.”
The original bill would’ve given vehicle owners the right to sue insurers who don’t use substantially equivalent parts; however, the Transportation Committee amended it during a Feb. 13 hearing to remove that portion.
“In our new cars, we have a lot of sensors and radar, and all of those things that, in order for them to continue to work, they have to be repaired with the parts that are made to run the radars and the sensors, so it’s gone from a cosmetic thing to a safety thing,” said bill sponsor Rep. Colin Jack (R-District 73) during the hearing.
“What we have found is that there is not always, in fact, maybe seldom, money set aside to bring our cars back to where we thought they would be. We’re finding that the auto body shops are instructed by the insurance companies that they need to buy a lesser part.”
Gavin Magor, director of research and ratings at Florida-based Weiss Ratings, testified that insurers argue non-OEM crash parts save money. However, he said P&C insurers offering auto insurance in Utah made $28.4 billion in 2024, the most profitable year since 2015.
Images
Featured image: State of Utah Capitol Building (Credit: Dave Collins/iStock)