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Can they use "pirate" and second hand parts in the repair of motor vehicles?

The Office of the Ombudsman for Short-Term Insurance frequently receives complaints from consumers concerning the use by Insurers when repairing motor vehicles of so-called “pirate parts” as well as second hand components.
There is a perception on the part of the public that an Insurer is obliged, when repairing a motor vehicle, to use new original factory supplied parts in all instances.
The Ombudsman, Mr. Brian Martin, says ”the cost of repairing damaged motor vehicles has risen significantly over time and is a major factor in the high cost of motor vehicle insurance.
If premiums are to be kept at reasonable levels and increases in premiums within similar bounds, it is imperative that everything possible be done to keep repair costs down, but at the same time without compromising safety or quality standards.”
The low incidence of comprehensive motor vehicle insurance is an area of major concern to the Ombudsman and the less affordable insurance products are the greater the temptation on the part of consumers to self-insure, which can have far-reaching consequences not only for the motorist himself, but society at large.
The Ombudsman points out that in the modern world very few motor manufacturers actually manufacture the components incorporated into their motor vehicles and a high percentage of these components are sourced from specialist component manufacturers.
Components may be common to more than one make of motor vehicle. A distinction is to be drawn between components made by reputable manufacturers which conform to recognise safety or quality standards and those which may be classified as fake or unauthorised copies made by unspecified manufacturers, often in China.
Original factory supplied components must be fitted whenever a critical component of the motor vehicle may be damaged or where the warranty or maintenance plan of a vehicle may be adversely affected by the fitment of other components. Depending upon the circumstance of each case and in particular the age and condition of a car, there is however no reason why components made by outside component manufacturers should not be used where this can result in cost savings, provided that issues of safety or reliability are not compromised.
The use of second hand parts, where appropriate, is also to be encouraged as a cost saving measure. The Ombudsman stresses that no hard and fast rule can be laid down and that each case must be assessed on its own individual merit.
However, he appeals to members of the public to be reasonable and practical in their approach to the repair of accident damage and by insurers, pointing out that the underlying purpose of insurance is one of indemnification and not enrichment.
He also draws attention to the fact that “betterment” is not applied in relation to individual components of a motor vehicle, but only where the overall value of an insured article has been increased through a process of repair or reinstatement. Should the insurer be able to show this through independent evidence, then the Ombudsman will allow a deduction from the claim to the extent of the “betterment”.

12 June 2009 - Ombudsman for Short-Term Insurance - Thanks to www.fanews.co.za