Toyota’s insurance subsidiary has started selling Toyota Auto Insurance (TAI) in five states, with promises of more widespread availability to come. Coverage applies to vehicles built by Toyota and other manufacturers, and includes an endorsement stipulating the use of genuine parts in repairs, when available, unless the customer opts out.
“We believe that using OEM parts is one of Toyota Auto Insurance’s key benefits and is particularly attractive to customers,” Vincent Bray, vice president of Toyota Financial Services, told Repairer Driven News. “When customers contact us, this feature is something we highlight as one of the many good reasons to choose this product.”
Bray said customers are offered a starting price that includes OEM parts approval for vehicles 10 years and newer. The customer has the choice to remove the endorsement, as well as the choice to add it to non-Toyota vehicles under 10 years old, he said.
He suggested removing the rider might appeal to customers “who are looking for a more budget-friendly solution.”
Without the current endorsement, the standard policy states that payment will be made for “parts of the same kind and quality”, which could come from “other sources such as manufacturers or suppliers of rebuilt parts, suppliers of quality, non-original equipment manufacturer recycled (used) parts.”
Toyota’s official position strongly recommends the use of genuine parts and strongly advises against aftermarket, rebuilt and salvage parts,”[d]due to the sensitive nature of safety and performance systems and their effect on vehicle crashworthiness.
“Toyota, Lexus and Scion Genuine Parts are made from metals with specific properties, thicknesses and design characteristics, designed to perform consistently and predictably in a crash. The use of non-OEM components may compromise overall crashworthiness and occupant safety in a subsequent crash,” Toyota Bulletin #180, revised December 2014, reads.
The terms of the policy make no reference to OEM procedures, or a preference for using certified repair facilities. Under the heading “Keep Your Toyota Like Toyota” on the Toyota Auto Insurance website, customers are offered “access to options such as Toyota Genuine Parts and Toyota Repair Facilities, so you can drive with confidence. Choosing a repair shop is a consumer right in all 50 states, and therefore no “access” to the certified shop option would be required.
Toyota Auto Insurance is not a product directly from the automaker, but from Toyota Insurance Management Solutions (TIMS). According to the Insurance Journal, TIMS is “a joint venture between Aioi Nissay Dowa Insurance Services, Toyota Financial Services International Corp. and Toyota Connected. It is an independent P&C licensed insurance agency.
Toyota Auto Insurance is currently available in Arizona, Illinois, Indiana, Ohio and South Carolina, and will soon be offered in Georgia, Missouri, Tennessee and Texas, Toyota said in a press release. He said future states will be added in the coming months.
TAI will be sold through Toyota’s website, mobile app, call center agents and participating Toyota dealerships. Insurance is underwritten by Toggle, the underwriter owned by Farmers Insurance.
TIMS has already collaborated with Travelers, Nationwide, Kemper, Progressive, Safeco, Bristol West, Foremost, National General, Clearcover and Mercury. These insurers also offer original parts coverage for an additional premium:
“Some TIMS partner insurance carriers offer the option of using original equipment manufacturer (OEM) parts for repair when an OEM part is available,” the TIMS website states. A footnote adds: “Approval of original equipment parts is optional; additional charges apply. Terms, conditions and limitations apply.
A usage-based insurance (UBI) product called BrightDrive, launched by Toyota in February 2020 in conjunction with Nationwide, also requires an optional extra-cost endorsement for OEM parts coverage. However, as with TAI, the default TIMS BrightDrive policy includes this addendum.
The “Original Parts Replacement Coverage” endorsement offered with TAI states the following (this document is from the Arizona Policy Project; other policy projects use the same or similar terms):
Original Parts Replacement Coverage
For an additional premium, the following coverage is provided.
A. INSURANCE CONTRACT
Under Part IV – Damage to Your Car, Insurance Agreement, the following is added:
It is agreed that cover is provided for the car(s) listed on the declarations page where a premium is shown for that cover and:
1. The insured car is no more than ten model years old.
2. The insured car was purchased, registered and used only on public roads in the United States.
B. LIMITS OF LIABILITY
Under Part IV – Damage to your car, for each car listed on the declarations page where a premium is shown for this coverage, the liability limits are amended to include the following:
Our limits of liability for loss of your car shall not exceed the amount necessary to repair or replace parts with new parts manufactured for or by the original equipment manufacturer, when available.
Coverage for original equipment manufacturer parts will no longer apply once your car is more than ten model years old. This coverage does not apply to a utility trailer that is not owned by you or a listed driver. This coverage does not apply to total losses. This endorsement is part of the policy. This changes the policy, so please read it carefully. All other terms and conditions of the policy continue to apply.
In its press release, Toyota said TAI “provides customers with a fast, easy and flexible policy purchasing process.” He noted that the insurance “integrates seamlessly with Toyota vehicle benefits such as Toyota Care Roadside Assistance, so customers aren’t paying for something their Toyota already provides.”
The product “is customizable based on how customers use their Toyota vehicle and their lifestyle, with a wide range of options, including coverage for carpool drivers or pet passengers. Non-Toyota vehicles in the customer’s household may also be covered,” Toyota noted.
Not currently offered with Toyota Auto Insurance, Toyota said, is a UBI option.
“We are delighted to bring our flagship auto insurance product to market. With Toyota Auto Insurance, we can truly enhance the complete Toyota ownership experience for our customers,” said Will Nicklas, COO of TIMS, in a press release. “We look forward to expanding this product even further, including allowing Toyota owners to seamlessly use their driving data to earn additional insurance discounts.”
Draft Policy for Arizona Customers
Terms and conditions
“OEM vs. AFTERMARKET: THE DIFFERENCE MATTERS”
Toyota Insurance Management Solutions Website
Featured image: A 2022 Toyota Tundra TRD Pro. (Supplied by Toyota)
A map shows the states where Toyota Auto Insurance is currently available or will soon be available. (Supplied by Toyota)