UPDATE: Virginia House Bill 1542 has been signed by the Governor and will become effective January 1, 2018. The Bill transfers the regulation of Home Service Contracts from the Bureau of Insurance to the Department of Agriculture and Consumer Services. Currently the Bureau of Insurance regulates both Home Service Contracts Providers as well as Home Protection Companies. The primary difference in the contracts offered by these two types of companies is that Home Protection contracts include coverage for major structural components of a home.
Under the new law, providers of contracts not covering major structural components, but providing for the repair or replacement of home appliances and components of home systems, would now be required to register with the Department of Agriculture and Consumer Services. The requirements under this legislation would be comparable to current law applicable to motor vehicle and consumer goods service contracts. Financial responsibility options would similarly include insuring a provider’s obligations under a contractual liability policy or maintaining a funded reserve and filing a surety bond or letter of credit with the agency. Providers demonstrating and maintaining net worth of at least $100 million would be exempt from the requirements of the new law.