Plain English Breakdown
The effective date is listed in the bill text but not explicitly confirmed in the metadata status section, though the summary states it begins July 1, 2027.
New Rules for Home Protection Contracts Sold by Utilities
Starting July 1, 2027, this law creates a new license type and sets rules allowing utility companies to sell home repair contracts on behalf of licensed agents.
What This Bill Does
- Creates a new license called 'home protection contract limited lines agent' for people authorized to transact these contracts through or in connection with a utility.
- Allows utilities to solicit contracts and collect fees if they act as vendors for specified entities, including the newly licensed agents.
- Requires that when collecting fees on a bill, it must be clear the contract is issued by a third party, list the fee separately from utility charges, and include a phone number for questions.
- Gives buyers 30 days to return their contract without penalty if no claim has been made yet.
- Requires home protection companies to maintain an insurance policy covering 100% of their obligations under these contracts.
Who It Names or Affects
- Homeowners who buy repair or replacement plans for appliances and systems through utility bills.
- Utility companies that want to sell or collect fees for home protection contracts as vendors.
- Agents, vendors, and employees involved in selling these specific types of contracts.
Terms To Know
- Home Protection Contract
- A contract that pays to fix or replace a component, system, or appliance of a home if it breaks.
- Limited Lines Agent
- A person with a special license allowed to sell only these specific home protection contracts through utilities on behalf of a company.
Limits and Unknowns
- The new rules for selling and licensing do not start until July 1, 2027.
- Utilities that were already collecting these fees before January 1, 2025, can keep doing so only until December 31, 2027.