Service Warranty Overview
A "Service Warranty" is a warranty, guaranty, extended warranty or extended guaranty, maintenance service contract equal or greater than 1 year in length that provides protection against the cost of repair, replacement or maintenance of a consumer product, in return for the payment of a premium. The complete definition of a Service Warranty is located in Section 634.401, Florida Statutes.
A service warranty contract can be written by a Service Warranty Association who is licensed pursuant to Section 634.403, Florida Statutes, or by an authorized insurance company who is authorized to write this line of business.
Service Warranty rates are not filed with nor approved by the Office of Insurance Regulation (OIR). According to Section 634.414, Florida Statutes, each service agreement sold in this state must be accompanied by a written disclosure to the consumer that the rate charged for the service agreement is not subject to regulation by the Office of Insurance Regulation. A service agreement company may comply with this requirement by including the disclosure in its service agreement form or in a separate written notice provided to the consumer at the time of sale.
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Section 634.282, Florida Statutes requires, if requested by the consumer, a complete sample copy of the terms and conditions of the service agreement (also referred to as an auto extended warranty) must be provided prior to the time of sale. A service agreement company may comply with this requirement by providing the consumer a sample copy of the terms and conditions of the service agreement or by directing the consumer to a website that displays a complete sample of the terms and conditions of the service agreement.
A service warranty association providing or offering service warranties to residents of this state must be licensed by the Office of Insurance Regulation (OIR). A service warranty association located in Florida is exempt from the licensing requirements as long as the service warranties are only sold and marketed to nonresidents of this state. However, there are certain reporting requirements to the OIR. For a complete review of these requirements, please review Section 634.403, Florida Statutes.
An insurance company authorized to issue property and casualty insurance in this state may issue service warranties without additional qualifications or authorization but must adhere to the specific service warranty statutes.
Section 634.171, Florida Statutes, addresses the licensure of a salesperson for motor vehicle service agreement products. A salesperson must be licensed. The salesperson must also hold an appointment with any insurer authorized to provide a motor vehicle service agreement.
Section 634.318, Florida Statutes, addresses the licensure of a salesperson for home warranty products must be licensed. The salesperson must also hold an appointment with any insurer authorized to provide a home warranty product.
Section 634.420, Florida Statutes, addresses the licensure of a salesperson for service warranty products must be licensed. The salesperson must also hold an appointment with any insurer authorized to provide a service warranty product.
Extended warranties can be a great way to provide continuing protection when purchasing valuable assets such as a home, automobile, or even electronics.
- If you are interested in purchasing a warranty, the Department of Financial Services recommends you follow these tips to make sure you get the coverage and benefits you want:
- Be sure you know the complete name of the warranty company providing your coverage. It may be listed as “underwritten by” somewhere in the material provided at the time of solicitation or purchase.
- Verify the warranty company is licensed in Florida to sell the product you are considering.
- Research complaints involving the warranty company through the Division of Consumer Services at www.MyFloridaCFO.com, the Better Business Bureau, the Internet, and repair facilities.
- Read the warranty material provided and be sure you understand the coverage, including deductibles, service charges and the length of the coverage period, before you purchase.
- Find out what repairs are covered, and for how long before you purchase an extended warranty. Also, find out if the original manufacturer offers a warranty on the product and for how long.
- Be sure you understand the exclusions, what is not covered or is limited by the warranty. You must understand your maintenance requirements/responsibilities as well.
- Be sure you understand your responsibilities in the event of a claim.
- Keep all documents related to your warranty (receipts etc.) together in one location. This documentation may be needed when you submit a claim.
- Don’t rush into a purchase.
- Please note the majority of solicitations received through the mail are not from the manufacturer of your product. They are generally solicitations from marketing agencies representing extended warranty companies.
If you purchase a warranty and the warranty company is ordered into receivership, your warranty and any pending claims are not guaranteed. Claims and any return premium will not be covered by any Florida guaranty association.