FINAL UPDATE – Michigan House Bill 4467 has been signed by the Governor and was effective immediately. This very important exemption legislation finally settles the regulatory status of service contracts as non-insurance.
This bill defines “service contract” in a manner consistent with a number of states and declares such contracts to not be subject to the state’s insurance code. Nor will the offering of such contracts be subject any other specific registration or financial responsibility requirements. This bill’s defines an exempt contract as on that promises to:
(i) To perform or provide reimbursement for the repair,
replacement, or maintenance of a consumer product because of the
operational or structural failure of the consumer product due to a
defect in materials or workmanship; accidental damage from
handling, power surge, or interruption; or normal wear and tear,
with or without additional provisions for incidental payment of
indemnity under limited circumstances, including, but not limited
to, towing, rental, and emergency road service.
(ii) The repair or replacement or indemnification for the
repair or replacement of a motor vehicle for the operational or
structural failure of 1 or more parts or systems of the motor
vehicle brought about by the failure of an additive product to
perform as represented.
(iii) The repair or replacement of tires or wheels on a motor
vehicle damaged as a result of coming into contact with road
hazards, including, but not limited to, potholes, rocks, wood
debris, metal parts, glass, plastic, curbs, or composite scraps.
(iv) The removal of dents, dings, or creases on a motor vehicle
that can be repaired using the process of paintless dent removal
without affecting the existing paint finish and without replacing
vehicle body panels, sanding, bonding, or painting.
(v) The repair of small motor vehicle windshield chips or
cracks, or if a windshield cannot be repaired, the replacement of
the windshield.
(vi) The replacement of an inoperable, lost, or stolen motor
vehicle key or key fob.
This bill defines “consumer product” tangible personal property distributed in commerce and normally used for personal, family or household purposes including any property intended to be installed or attached in real property whether or not it is installed or attached.
The legislation is effective upon enactment (signature of the Governor).