Allianz Cornhill has launched a three month pilot project to test the use of recycled parts in repairing vehicles.

From 1 October 2006 policyholders from the public and commercial sectors who own vehicles of five years and older will be invited to consider the use of recycled parts to repair their vehicles.

The insurer said that as well as reducing the environmental impact of repairing vehicles, it would look at whether the scheme helps to reduce claim costs.

Allianz Cornhill said: “The use of recycled parts will be entirely voluntary. Policyholders will have a 24-hour cooling-off period during which time they can change their minds and decide for or against using recycled parts.

“Safety and quality of repair will not be compromised as the recycled parts used will not be structural, subject to wear or have a safety function such as brake and steering components. They will be identified to the customer at the start of the repair and mostly be cosmetic parts.”

The parts will be distributed by vehicle salvager Car Transplants to the ten Allianz Cornhill approved repairers from across the country that are taking part in the pilot.

At the end of the three-month pilot Allianz Cornhill will analyse information on quality, availability and customer feed back. It will give the company the chance to measure consumers' appetite for environmentally friendlier methods and the viability of providing the service.

Allianz Cornhill motor damage claims manager, Dane Loosley, said: "This project will enable us to determine the customer view of continuing this scheme in the long term. The pilot will also give us a chance to see how distribution needs to develop in order to provide bodyshops with fast, accurate delivery of the parts. We will be monitoring the repair duration and the speed of customer service."

Loosley said: "We anticipate customers will benefit from a reduction in the number of older vehicles that are written off as a total loss due to the relatively high cost of parts. By using these parts to reduce repair costs we can return more lightly damaged vehicles to owners who express a preference.

"We will be monitoring the general effect that use of recycled parts has on claims costs. These have been rising steadily over the past few years, a trend that looks set to continue. Any move, however small, to slow this down will be good news for customers."

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