I used to be a claims representative for a large insurance company, and we were required to pay for brand new OEM equipment for ANY safety related item - including air bags and all components associated (clockspring, sensors, etc.). A lot of times when the air bags are deployed in an accident, the car is deemed a total loss because of the high cost and labor associated with the work. However, most modern cars can turn off passenger air bags when there is no passenger in the car, so a single air bag deployment may not be enough to total a car.
That being said, just because an insurance company pays the shop to do the work using a specific part, there is no guarantee that's what will happen. On several occasions, we received complaints from customers regarding shoddy work, and oftentimes it was because a shop tried to cut corners somewhere (using non-authorized parts, repairing a part that should have been replaced, etc.).
I also understand the point of view of the shop - the insurance company is trying to pay as little as possible to get the vehicle back into "pre-loss" condition. So the shop feels squeezed and there is little room for negotiation.
It's a shame that the customer is the one who ends up losing.
