Motor vehicle service contracts sold or used in the state must include specified disclosure information and cancellation notice rules.
§3164. Required disclosures; service contracts A. Each motor vehicle service contract marketed, sold, offered for sale, issued, made, proposed to be made, or administered in this state shall be written, printed, or typed in clear, understandable language that is easy to read and shall disclose the requirements set forth in this Section, as applicable. B. Every motor vehicle service contract shall contain all of the following information: (1) The name and address of the provider and shall identify any administrator if different from the provider. (2)(a) Motor vehicle service contracts insured under a reimbursement insurance policy shall contain a statement in substantially the following form: "Obligations of the provider under this service contract are insured under a service contract reimbursement insurance policy." The motor vehicle service contract shall also state the name and address of the insurer. (b) This Paragraph shall not apply to a motor vehicle manufacturer's service contracts on the motor vehicle manufacturer's products. (3) The name of the motor vehicle service contract seller and name of the service contract holder to the extent that the name of the service contract holder has been furnished to the service contract provider. The identities of parties are not required to be preprinted on the service contract and may be added to the service contract at the time of sale. (4) The total purchase price and the terms under which the service contract is sold. The purchase price is not required to be preprinted on the service contract and may be negotiated at the time of sale with the service contract holder. (5) The existence of any deductible amount, if applicable. (6) The goods and services to be provided and any limitations, exceptions, or exclusions. (7) Any restrictions governing the transferability of the service contract, if applicable. (8) The terms, restrictions, or conditions governing cancellation of the service contract prior to the termination or expiration date of the service contract by either the provider or the service contract holder. The provider of the service contract shall mail a written notice to the contract holder at the last known address of the service contract holder contained in the records of the provider at least fifteen days prior to cancellation by the provider. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee, a material misrepresentation by the service contract holder to the provider, or a substantial breach of duties by the service contract holder relating to the covered product or its use. The notice shall state the effective date of the cancellation and the reason for the cancellation. (9) The obligations and duties of the service contract holder, including but not limited to the duty to protect against any further damage and any requirement to follow an owner's manual. (10) A statement as to whether or not the service contract provides for or excludes consequential damages or preexisting conditions, if applicable. Service contracts may, but are not required to, cover damage resulting from rust, corrosion, or damage caused by a noncovered part or system. (11) If prior approval of repair work is required, the procedure for obtaining prior approval and for making a claim, including a toll-free telephone number for claim service and a procedure for obtaining emergency repairs performed outside of normal business hours. (12) A statement that contains all of the following provisions: (a) The motor vehicle service contract is not insurance. (b) The motor vehicle service contract is not regulated by the Department of Insurance. (c) Any concerns or complaints regarding the motor vehicle service contract may be directed to the attorney general. Acts 2018, No. 592, §2, eff. Feb. 1, 2019.