A Delaware bill that exempts service contracts from the state’s laws regarding insurance has been signed into law.
Specifically, the text of the bill, H 106, says, “The offering, sale, or issuance of a service contract, vehicle theft protection product warranty, or maintenance agreement shall not be considered insurance or subject to the insurance laws of this state unless made expressly applicable thereto.”
The bill defines a service contract as “a contract or agreement for a separately stated consideration for any duration to perform the repair, replacement, or maintenance of a consumer product or indemnification for the same, for the operational or structural failure of a consumer product due to a defect in materials, workmanship, accidental damage from handling, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including towing, rental, and emergency road service and road hazard protection. Service contracts may provide for the repair, replacement, or maintenance of a consumer product for damage resulting from power surges or interruption. Service contract also includes a contract or agreement sold for a separately stated consideration for a specific duration that provides for any of the following …”
H 106 then goes on to list a number of automotive services, including “the repair of chips or cracks in or the replacement of motor vehicle windshields as a result of damage caused by road hazards.”
The bill was introduced on March 28. It passed the House on May 14 and the Senate on June 11. The governor signed the bill on June 26 and it takes effect immediately.
Click here for the full text of H 106.