2022 Service Contract Legislation

August 18, 2022

by Seth Maiman
AGSC Director of Public Affairs

Bills are usually introduced in several states each year that seek to include the repair of windshield chips or cracks or replacement as a result of a road hazard within the legal insurance code definition of a “service contract.” This means if a vehicle owner entered into such a contract with an insurance/repair provider, the contract would be required to cover the cost of the repair/replacement due to such circumstances. Legislation of this type was enacted in 2022 in New Jersey and Wyoming. South Dakota enacted a law that includes the repair and replacement of windshields in the definition of a service contact but exempted such contract from the state insurance code. Below is a summary of the legislative activity relating to service contracts across the United States this year.

Legislation that has been enacted:


In August 2022 New Jersey enacted legislation, S902/A1559, that imposed certain consumer protection requirements of service contract providers. The new law reiterates existing law, under New Jersey Section 56:12-87(1)(3), that “the repair of small motor vehicle windshield chips or cracks which may include replacement of the windshields for chips or cracks that cannot be repaired” is one of the services to be provided under a “Motor Vehicle Ancillary Protection Product” commonly referred to as a service contract. For text of the bill, CLICK HERE.


South Dakota enacted legislation, S 160, in 2022 that exempts automobile service contracts from the state insurance code and specifically allows for “the repair and replacement of motor vehicle windshields … that are damaged as a result of contact with road hazards” to be covered by such an exempt contract. For text of the bill, CLICK HERE.


In March 2022 Wyoming enacted legislation, HB 64, that amended the scope of service contracts. The new law specifically includes “the repair of small windshield chips or cracks in or the replacement of the entire windshield as a result of damage caused by road hazards” as one of the services that would define a “service contract”. For text of the bill, CLICK HERE.

Legislation that has been introduced:


Legislation has been introduced in New York, S9100/A10591, that would amend the definition of a service contract to confirm that coverage for power surges and accidental damage from handling is not incidental coverage and may be offered separately from other contract coverage. The bills reiterate current New York Insurance Law Section 7902 (k) (2) that the term “service contract” may mean an agreement “by or for the supplier or seller of a service for repair of chips and cracks in a motor vehicle windshield, but not including services that involve the replacement of the entire windshield.” The bills are currently in the Senate and Assembly Insurance Committees. For text of the legislative proposal, CLICK HERE.

Legislation that failed to move forward:


Kansas legislation, H 2638, would have added “the repair of chips or cracks in or the replacement of automobile windshields resulting from damage caused by roadside hazards” to the legal definition of a service contract. The bill died in May 2022 in the House Committee on Insurance and Pensions. For text of the failed proposal, CLICK HERE.

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