§ 38.2-2621

Required disclosures regarding home service contracts

A. Home service contracts marketed, sold, offered for sale, issued, made, proposed to be made, or administered in the Commonwealth shall be written, printed, or typed in clear, understandable language that is easy to read, and shall disclose the requirements set forth in this section, as applicable.

B. Home service contracts insured under a reimbursement insurance policy pursuant to subdivision F 1 of § 38.2-2619 shall contain a statement in substantially the following form: “Obligations of the provider under this home service contract are insured under a home service contract reimbursement insurance policy.” The home service contract shall also state the name and address of the insurer.

C. Home service contracts not insured under a reimbursement insurance policy pursuant to subdivision F 1 of § 38.2-2619 shall contain a statement in substantially the following form: “Obligations of the provider under this home service contract are backed by the full faith and credit of the provider.”

D. Home service contracts shall state the name, telephone number, and address of the provider, and shall identify any administrator if different from the provider, the home service contract seller, and the home service contract holder to the extent that the name of the home service contract holder has been furnished by the home service contract holder. The identities of such parties are not required to be preprinted on the home service contract and may be added to the home service contract at the time of sale.

E. Home service contract providers shall provide a written notice to the contract holder advising that if he is unable to contact or obtain satisfaction from the home service contract provider that he may contact the Commission and shall provide the appropriate address and toll-free telephone number.

F. Home service contracts shall state the total purchase price and the terms under which the home service contract is sold. The purchase price is not required to be pre-printed on the home service contract.

G. Home service contracts shall state the existence of any trade service fee, if applicable.

H. Home service contracts shall specify the merchandise and services to be provided and any limitations, exceptions, or exclusions.

I. Home service contracts shall state any restrictions governing the transferability of the home service contract, if applicable.

J.

1. Home service contracts shall state the terms, restrictions or conditions governing cancellation of the home service contract prior to the termination or expiration date of the home service contract by either the provider or the home service contract holder. However, no home service contract provider shall cancel a home service contract during the initial term of the contract except for (i) nonpayment of provider fees, (ii) fraud or misrepresentation of material facts, or (iii) in the case of contracts providing coverage prior to the time the residential property is purchased, should the purchase of the property not occur.

2. If the home service contract is cancelled by the provider, the provider shall mail a written notice to the contract holder at the last known address of the home service contract holder contained in the records of the provider at least five days prior to cancellation. Notice of cancellation shall be in writing and shall state the effective date of the cancellation and the reason for the cancellation. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee, material misrepresentation by the home service contract holder to the provider, or a substantial breach of duties by the home service contract holder relating to the covered item or its use.

K. Home service contracts shall set forth all of the obligations and duties of the home service contract holder, such as the duty to protect against any further damage and any requirement to follow the owner’s manual.

L. Home service contracts shall state whether or not the home service contract provides for or excludes consequential damages or pre-existing conditions, if applicable. Home service contracts may, but are not required to, cover damage resulting from rust, corrosion, or damage caused by a noncovered part or system.

M. If prior approval of repair work is required, a home service contract shall state the procedure for obtaining prior approval and for making a claim, including a toll-free telephone number for claim service and if offered, a procedure for obtaining emergency repairs performed outside of normal business hours.

N. Home service contracts shall include a provision stating that a response and a plan for covered services contracted for by or under the direction of a home service contract provider shall occur within 72 hours of the request for the service by the contract holder.

History

2006, c. 634.

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