The definition of "insurance quality" auto parts will differ depending upon state laws and insurance companies' own definitions and guidelines. In general insurance companies are looking for good quality parts that can be used to repair a vehicle and in some cases so that they can guarantee the repair work, and parts, for a certain amount of time.

Many insurance policies state that parts other than new manufacturer's parts may be used in the repair of a vehicle after and accident. These parts are referred to as LKQ (Like, Kind and Quality). So while they are not new OEM (original equipment manufacturer) parts they are of high quality and will keep the car in good repair. So parts that have defects or are "junk" parts should not be used in repairs where insurance quality parts are required.

For example in Florida it is against state statutes to use aftermarket parts that are not of like kind and quality as the original parts. In FL if during the course of a car repair if an aftermarket crash part is used repair shops are requested by the state to maintain records documenting that the part is at least equal to the manufacturer’s original equipment. Insurers need to use parts that will restore the vehicle to its pre-crash condition.

Basically after an accident the insurance company normally owes the car owner repair or replacement with like kind and quality parts, not necessarily new parts. If the parts and repairs are guaranteed by the repair shop, and are in the same condition as the parts damaged, they usually conform to the repair requirements.

Another example is GEICO's explanation for the parts they use when repairing claims. Their term page call them Competitive Auto Repair Parts. They define it as parts made by a company other than the manufacturer of the auto. All parts we authorize meet or exceed the quality of the manufacturer's parts, but cost less. GEICO guarantees these parts for as long as you own the car.

Many states are now putting into laws limits on what type of parts may be used in repairing a vehicle after an accident. While, in some cases, salvaged / used or non-OEM parts are permitted, some states are now requiring actual manufacturer parts (OEM) be used in the repairs. Check with your state's insurance regulatory body for the laws governing aftermarket and used parts and to make sure what you supply as “insurance quality” parts stand up to the requirements of your state’s regulation.