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State Farm Ruling Should Inspire Consumer Choice

8 October 1999

State Farm Ruling Should Inspire Consumer Choice; Aftermarket Association Clarifies 'Aftermarket Parts'

    BETHESDA, Md., Oct. 7 -- The Automotive Aftermarket Industry
Association (AAIA) expects that the recent $456 million verdict against State
Farm Mutual Automobile Insurance Company will give consumers greater choice by
forcing insurance companies to disclose to policyholders the types of autobody
repair parts covered.
    "Whether it's health insurance, home owners insurance or car insurance,
the consumer should know up-front specifically what is covered," said Gene A.
Gardner, AAIA president.  "When a car owner is in an accident, he or she
should have a choice in what type of fender, hood, trunk lid or other exterior
sheet metal is used to repair their vehicle."
    "By choice we mean the car owner should have the option of purchasing the
appropriately priced part for their vehicle based on its age, value and
condition whether the part is manufactured by the original car maker or by an
independent company," said Gardner.
    A jury Monday awarded $456 million to policy holders of State Farm
insurance company in a class action suit for its practice of encouraging
policyholders to use non-original equipment auto body parts.
    AAIA, the trade association representing every segment of the $264 billion
automotive aftermarket, cautions, however, that reports about the class action
lawsuit are misleading consumers.
    "Sheet metal parts used to manufacturer body parts to replace parts
damaged in an accident account for only a fraction of the aftermarket
industry," said Gardner.  "Reports on this court decision that reference
aftermarket parts in general are inaccurate and unfair."
    Sheet metal parts represent only 1.8 percent of the aftermarket and are
typically sold through collision repair shop.
    "Aftermarket parts have a longstanding reputation for quality.  They meet
or exceed the standards set by the vehicle manufacturers themselves and many
aftermarket parts are made by the same companies who make parts for the
automakers which are sold in new car dealerships," explained Gardner.
    The Automotive Aftermarket Industry Association (AAIA) is a Bethesda, Md.-
based association whose member companies manufacture, distribute and sell
motor vehicle parts, accessories, tools, equipment, materials and supplies.
The organization is comprised of manufacturers, distributors, jobbers,
wholesalers, retailers, manufacturer's representatives, and other companies
doing business in the automotive aftermarket.  AAIA formerly served the
automotive aftermarket as APAA and ASIA.