Filed Under:Markets, Regulation/Legislation

Industry Groups Supporting Crash Parts Law

NU Online News Service, Feb. 3, 3:46 p.m. EST

The property and casualty insurance industry is supporting legislation that would alter patent law to allow for use of parts not made by the manufacturer in repairing damaged vehicles.

The Promoting Automotive Repair, Trade, and Sales or PARTS Act, was introduced by Rep. Darrell Issa (R) and Zoe Lofgren (D), both of California.

The bill amends patent law to limit to 2 and half years the period during which car companies can enforce their design patents on collision-repair parts against alternative suppliers.

The Property Casualty Insurers Association of America; the National Association of Mutual Insurers and the American Insurance Association say they are supporting the bill because the bipartisan legislation will benefit consumers by providing greater availability and competition in the automotive collision repair parts market and preventing car company monopolies on repair parts.

“We strongly support the PARTS Act legislation introduced today in the House,” says Ben McKay, PCI senior vice president of federal government relations.

“This bill will change the U.S. design patent law to preserve competition and protect consumers’ right to access quality, low-cost alternative collision repair parts,” he adds.

NAMIC officials say the bill “maintains the incentive for auto manufacturers to be innovative in their parts designs,”

Jimi Grande, senior vice president of federal and political affairs for NAMIC, says a 2010 study by NAMIC found that elimination of competition for repair parts could increase the average annual insurance premium for an automobile by as much as $109.

Cosmetic aftermarket repair parts can cost as much as 50 percent less than those made by the original manufacturer, and have no bearing on safety, the study found.

The Insurance Institute for Highway Safety has said that the use of such parts is “irrelevant” to the crash-worthiness of a vehicle, Grande notes.

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