insurance warranties
Are warranties held to the same laws as regular insurers?
<p>In the case a consumer has purchased a warranty – in particular so-called &quot;extended warranties&quot; from a third party warranty vendor – on a vehicle (further, to be clear, I am not talking about any &quot;lemon law&quot; warranties), is the warranty subject to the same laws/statutes that a regular auto insurer is subject to? For example, to my knowledge almost all states detail some restrictions on how insurance settlement costs may be fairly calculated – e.g., NADA values. Similarly, some states allow consumers to pick their repair place and have independent inspections or that an insurer is liable for the degradation of value incurred by vehicles that have been in accidents are less desired.</p>
<p>Is a warranty held to these same policies in general?</p>
<p>My question pertains to the United States. I am most interested in CT law but more general answers are also appreciated.</p>

<p>Such &quot;warranties&quot; are generally subject to separate laws, and they are not treated as a subcase of &quot;car insurance&quot;. Whereas homeowners insurance, vehicle liability insurance and so on are regulated in all states, extended warranties are regulated in over half of the states. There is a <a href="https://content.naic.org/sites/default/files/inline-files/MDL-685.pdf" rel="nofollow noreferrer">model law</a> which tends to inspire state legislators in writing their own laws, and here is an <a href="https://app.leg.wa.gov/RCW/default.aspx?cite=48.110&amp;full=true" rel="nofollow noreferrer">instantiation in Washington state</a>. At the outset, the law says that <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=48.110.015" rel="nofollow noreferrer">certain things are <em>not</em> covered</a>, including
warranties, maintenance agreements and service contracts (what then <em>is</em> covered??).</p>
<p>There may be <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=48.110.070" rel="nofollow noreferrer">&quot;required content&quot;</a>, for example</p>
<blockquote>
<p>Service contracts shall state the procedure to obtain service or to
file a claim, including but not limited to the procedures for
obtaining prior approval for repair work, the toll-free telephone
number if prior approval is necessary for service, and the procedure
for obtaining emergency repairs performed outside of normal business
hours or provide for twenty-four-hour telephone assistance.</p>
</blockquote>
<p>There are <a href="https://app.leg.wa.gov/RCW/default.aspx?cite=48.110.073" rel="nofollow noreferrer">sections specific to motor vehicles</a>, which could be relevant, for example &quot;A service contract provider shall not deny a claim for coverage based upon the service contract holder's failure to properly maintain the vehicle, unless the failure to maintain the vehicle involved the failed part or parts&quot;.</p>
<p>At the bottom of the Model Act document is a list of statuses in the various states: it's status in Connecticut is nonexistence, as of July 2014 (and no signs of such a law having been subsequently passed). There is a general <a href="https://www.cga.ct.gov/current/pub/art_002.htm#sec_42a-2-313" rel="nofollow noreferrer">law about express warranties</a>, which doesn't impose any content restrictions on such contracts. So in CT, it depends on what the contract says.</p>

<p><strong>California law</strong></p>
<p>They are considered &quot;service contracts&quot; wherein they are subject to the Song-Beverly Consumer Warranty Act nor they are subject to the Insurance Code of California.</p>
<p>California Civil Code §1791(o) “Service contract” which &quot;means a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair of a consumer product, except that this term does not include a policy of automobile insurance, as defined in Section 116 of the Insurance Code&quot;, it seems, if they meet certain additional conditions that would make them the subject of Insurance Code, they would no longer enjoy protections and would not have to abide by the Song-Beverly Consumer Warranty Act.</p>
