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).
Insurance Encyclopedia
AG
HCPCS Level II modifier that may be used with CPT or HCPCS Level II codes indicating services performed by a primary physician. Use of this modifier affects Medicare payment.
Against medical advice (AMA)
Discharge status of a patient who leaves the hospital before being released by a physician.
Age 75 rule
IR rule allowing members of defined contribution pension arrangements to defer the compulsory purchase of an annuity until age 75. During the deferment period the member may take ‘income drawdown’ within prescribed limits.
Age admitted
See: Admission Of Age.
Age analysis
Procedure of systematically arranging the accounts receivable, by age, from the date of service.
Age attained
The age last birthday of a proposer for life insurance.
Age break
Phrase used in insurance rating purposes that relates to the grouping of age categories (e.g., females age 18-25).
Age change
Date halfway between natural birth dates when the age of an individual changes to the next higher age. It is referred to when an individual is purchasing life insurance; the insurance age being the nearer birthday. When purchasing an annuity, the annuity age considered is the last previous birthday.
Age Discrimination in Employment Act of 1967 (ADEA)
Federal legislation that protects employees age 40 and older and requires employers to offer employees 65 years or older the same employment and health insurance benefits as offered to younger employees. ADEA prohibits an individual from being fired based on age and prevents employers from forcing employees to retire at age 65. ADEA also prohibits employers from stopping contributions or accrual of benefits to pension plans after workers reach age 65.