Diamond Standard addresses California's new aftermarket parts regulations

With the recent announcement of new aftermarket parts regulations by the California Department of Insurance (DOI), Diamond Standard contacted the organization to discuss compliancy related to its parts.

Diamond Standard issued an Insurer Case study to provide industry clarity including a brief background, Diamond Standard's history with CDI for total transparency, the regulations, brand representations, the company's part compliancy to the amended regulations, and pathway forward for insurers and repairers in addressing the complaint that non-compliant parts continue to infiltrate the repair process. Here is the Diamond Standard Insurer Case study:

Insurer Case Study:
New Regulations – Aftermarket Crash Parts
January 11, 2013 and Compliancy

BACKGROUND:

California Insurance Commissioner Dave Jones announced on January 4, 2013 that the Office of Administrative Law has amended regulations submitted by the California Department of Insurance (CDI) regarding the use of aftermarket crash parts and are expected to become effective on January 30, 2013 with compliance required on March 30, 2013.

The new regulations were sought to further protect California consumers from physical and financial harm caused by defective or non- compliant aftermarket parts which continue to infiltrate the repair process; the substantial costs borne by automobile repair shops and their customers associated with installing defective or poorly fitting parts, while enhancing insurer accountability in the claims process.

“This also places greater accountability on the insurer when they require use of an aftermarket replacement part so that damaged automobiles are repaired properly and safely” - Commissioner Jones.

Obligated to be forthright, Michael J. O’Neal, President of Diamond Standard Parts, LLC met with CDI officials in 2010 to discuss and at that time validated the case that not all aftermarket structural parts are built the same as Diamond Standard.

REGULATIONS:

Specifically, the new regulations set forth that  no insurer shall require the use of non-original equipment manufacturer replacement crash parts in the repair of an automobile unless all of the following conditions are met:

• the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance (compliant part)
• the insurer warrants that such parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance and disclose this in writing, in any estimate prepared by or for the insurer
• the insurer specifying the use of non-original manufacturer parts shall pay the cost of any modifications to the parts that may become necessary to effect the repair
• all original and non-original manufacturer parts, manufactured after the effective date of this subdivision when supplied by repair shops shall carry sufficient permanent, non-removable identification so as to identify the manufacturer; accessible to the greatest extent possible after installation (compliant part)
• if an insurer specifying use of non-original parts has knowledge that a part is not equal to the original part in terms of kind, quality, safety, fit and performance or does not otherwise comply it shall immediately cease requiring use of the part and shall, within thirty (30) days, notify the distributor of the non-compliant aspects
• insurer shall pay the cost associated with returning the non-compliant part and the cost to remove and replace the non-original equipment with a compliant nonoriginal or original equipment part

DIAMOND STANDARD REPRESENTATIONS

Diamond Standard has from its inception embraced the competency and standards of the auto body repair industry as it relates to structural bumper components and the production methodology used by the OEM. As a centerpiece of the “One Quality Manufacturing” model, Diamond Standard believes the original part is the standard and it is the responsibility of all competitive manufacturers of structural bumper components to replicate the safety and damageability characteristics of the OE parts they replace. It is for this very reason not withstanding the findings of CDI that our replacement part policy has been OEM or Diamond Standard only.

There exists an implied warranty of merchantability of any aftermarket part that the part is fit for the ordinary purposes for which the part is used. The buyer of that part and ultimately the consumer is relying on the manufacturer’s skill, judgment and integrity to select proper material and apply the necessary quality standards to the manufacturing process to furnish suitable goods and goods that are accompanied by the manufacturer’s implied warranty of fit. In fact, “There are no aftermarket structural parts manufacturers in the world more accountable than those under the Diamond Standard Brand. Further, the majority of other aftermarket structural part manufacturers have limited accountability, traceability or liability compared to Diamond Standard” - Michael J. O’Neal, President of Diamond Standard Parts, LLC.

DIAMOND STANDARD COMPLIANCY

“You can put your trust in programs. You can put your trust in labels, but at the end of the day you better know, trust, and believe in the parts manufacturer, and ask yourself “are they true guardians of quality and safety and can I trust they will continue to be in the future” – Michael J. O’Neal.

Diamond Standard Brand parts meet the criteria of Compliant parts, supplying “One Quality” parts that carry permanent, non-removable identification, easily accessible to the repairer identifying Diamond Standard parts.

Diamond Standard Brand parts are based on exacting standards and protocols and designed to restore the vehicle to the pre-accident condition. Use of Diamond Standard Brand parts meets the criteria of compliancy with over 1,500 NSF and CAPA certified parts backed by extensive testing in our DSTL ISO17025 Lab and by independent third party certifications at CAPA/Intertek, NSF and MGA Design Research. One part, three certifications represent a level of expert third party scrutiny unparalleled in the industry by any competitive manufacturer.

Diamond Standard Brand parts are covered by a limited lifetime warranty for all new Diamond Standard Brand parts which clearly exceeds the OEM service part warranties of 12 months/12,000 miles.

Repairers, Consumers and Insurers are covered by the Diamond Standard Security Shield’s $40 million dollar product liability indemnification protection program in the unlikely event of a part failure.

Diamond Standard Brand through an exciting new industry first is addressing the complaint that Non-compliant parts continue to infiltrate the market by giving insurers and repairers a clear path to meeting the guidelines. The new program, UnSub, will add a new dynamic to selecting the correct parts option as defined in the regulations.