Authors: Representative Thomas Dermody
Defines a home warranty as a contract under which the home warranty provider undertakes to indemnify the warranty holder against the cost of repairing or replacing a home appliance if repair or replacement is needed. Prohibits a person from acting as a home warranty provider unless the person has obtained a license from the department of insurance (department) and deposited a surety bond, securities, or a sum of cash with the department. Prohibits the use of a home warranty form unless it has been submitted for review by the department. Requires that a person, upon purchasing a home warranty, immediately be given a copy of the home warranty, and entitles the person to rescind the home warranty and receive a full refund within three business days after acknowledging receipt of a copy of the home warranty in writing. Provides that a home warranty provider's obligation in connection with the repair or replacement of a home appliance cannot be limited to a specified dollar amount irrespective of the actual cost of repairing or replacing the home appliance. Provides that, if a home warranty contains an arbitration clause, the warranty holder cannot be required to pay the cost of repairing or replacing a home appliance before the arbitration proceeding, and the arbitration must be held in the county in which the warranty holder resides. Makes a violation of the law an unfair and deceptive act or practice in the business of insurance and a deceptive act that is actionable by the attorney general.