original equipment manufacturer (OEM)

An original equipment manufacturer (OEM) is the company that originally designed or is an approved supplier of a manufactured vehicle, equipment, or component. In auto insurance, the term commonly refers to OEM replacement parts used to repair a damaged vehicle after a loss. OEM parts are distinguished from aftermarket, recycled, or reconditioned parts because they are designed to match the original part's fit, function, and specifications. Whether an insurer will pay for OEM parts depends on whether the loss is covered, policy language, applicable endorsements, state law, parts availability, and the age or condition of the vehicle.