Motor vehicle service contracts and vehicle protection product warranties

What it does

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

Under current law, service contracts are generally exempt from regulation under the insurance statutes but are subject to limited regulation by the Office of the Commissioner of Insurance. Service contracts with motor vehicle manufacturers are subject to some of those limited regulations. Service contracts, as defined in current law, are contracts or agreements for separate consideration for a specified time period to perform repair, replacement, or maintenance of property under certain circumstances. Current law provides a list of contracts or agreements that constitute service contracts. This bill adds to the list the repair or replacement of a motor vehicle key or key fob that has become inoperable or is lost or stolen. The bill also adds to the list the repair, replacement, or maintenance of a motor vehicle, directly or by indemnification, for excess wear that results in excess wear and use charges at the end of a lease under a motor vehicle lease agreement, if the value of any benefits under the contract or agreement does not exceed the purchase price of the motor vehicle.

Also, current law requires a person obligated by a warranty (warrantor) for a vehicle protection product that prevents loss or damage to vehicles to register and file certain information with OCI. The bill specifies that a warrantor is not required to obtain approval from OCI for the terms of a vehicle protection product warranty.

Who's behind it

Roger Roth, a Republican, is its author⁠.

4 more lawmakers signed on in support⁠.