IA HSB698

For first-party partial-loss motor vehicle claims settled using aftermarket crash parts, property insurers must base payment only on parts available from distributors within 100 miles of the insured's designated repair facility.

For third-party partial-loss claims, liability insurers must pay based on the cost of new original equipment manufacturer (OEM) parts unless the vehicle owner provides express written consent to use aftermarket or salvaged parts.

Insurers must pay for any modifications that become necessary when repairs are made using aftermarket crash parts or parts salvaged from the crashed vehicle.

When using non-OEM parts in third-party claims, insurers must agree to defend and indemnify the vehicle owner and repair facility against any claims related to those repairs.

Violations may result in cease and desist orders, civil penalties ranging from $1,000 to $50,000, and potential suspension or revocation of business licenses.