When repairing a vehicle after an accident, repair shops and insurance companies have two types of vendors where replacement parts can be purchased. One source is the original manufacturer of the vehicle, called original manufacturer, or OEM. For example, if a Ford vehicle is damaged by in an accident and the parts used to repair the vehicle are manufactured by Ford, then the parts are OEM. Prior to 1970, body parts such as fenders, door panels, and grilles could only be purchased from the original automobile manufacturer.After 1970 a second source of parts developed, called aftermarket or generic parts. These parts are manufactured by independent companies to fit vehicles manufactured by all the different auto companies. In almost all cases, the aftermarket part is less expensive than the OEM part. While some argue that aftermarket parts lack the quality of OEM parts, organizations such as Certified Automobile Parts Association (CAPA) and the Insurance Institute for Highway Safety have affirmed that the quality of aftermarket parts is not inferior to OEM parts.Because of the regulation of insurance practices at the state level, the regulations concerning using aftermarket parts vary widely. Most states do permit the use of aftermarket parts. Only a few do not allow the use of aftermarket parts. In some of the states that permit the use of aftermarket parts, the insurance company can use aftermarket parts in satisfying a claim without the insured’s consent or even knowledge. In other states, the insurance company is required to notify the policyholder that aftermarket parts were used, but the policyholder has no voice in what is used. In a few states, insurance companies must notify the policyholder and must also obtain the insured’s permission to use aftermarket parts. While the use of aftermarket parts reduces the cost of claims, the rationale has to do with the concept of indemnity. That is, the purpose of insurance is to put the policyholder in the same financial condition he or she was before the accident but not to improve that financial condition. (See Actual Cash Value; Indemnity).