This article explores the laws governing the sale of best extended auto warranty companies in each state. You may be surprised to find out that some states are unregulated at all. The best way to start is by learning what states don’t regulate extended auto warranty sales. Here are a few exceptions to that rule. Delaware does not regulate extended auto warranty sales. However, you should still know your rights as a consumer.
Connecticut
Extended auto warranty sales in Connecticut are regulated under the General Statutes Title 42: Business and Trading Practices. However, there is a gray area regarding the laws regulating the sale of extended warranties. The laws are primarily intended to protect consumers against problems that arise with the warranties. This article will discuss some of the specifics of the Connecticut laws. Hopefully, it will help you make the best decision when purchasing a warranty.
Before a company can offer extended warranties in Connecticut, it must register with the state, obtain a license and insure contracts. To comply with this regulation, the company must also have a bond worth at least $25,000 and insurance policies that guarantee payment if a claim arises. All contracts must clearly state the insurance company. In addition, companies can either keep a trust account with forty percent of their annual revenues or a funded account with at least $25,000 to cover any unforeseen costs. This isn’t required if a company has a net worth of at least $100 million.
A regulated Connecticut auto warranty sale is different than the one in other states. Rather than collecting sales tax on the resale of repair services, Connecticut requires the person purchasing it to pay use tax. Similarly, a maintenance contract sold in Connecticut must be taxable. In order to sell a maintenance contract, the retailer must collect and remit the required taxes. If the dealer does not collect and remit these taxes, it will be illegal to sell the contract.
In Connecticut, extended auto warranty sales are regulated by the Connecticut General Assembly. The law was recently amended to clarify that service contracts are not insurance. Service contracts fall under the general consumer protection complaint process. Connecticut residents should carefully read car warranty contracts before purchasing one. Fortunately, the state has made these contracts more consumer-friendly. If you’re buying an extended auto warranty in Connecticut, make sure you read the contract thoroughly and make sure you understand its terms.
Delaware
Currently, there is no specific legislation in Delaware regulating extended auto warranty sales. However, the Delaware General Assembly recently amended the law to clarify that service contracts are not insurance. Because these contracts fall under the general consumer protection complaint process, consumers should read the fine print before signing anything. They can also research companies before signing anything. Listed below are some common questions consumers should ask when considering a service contract. Hopefully, this information will help you make an informed decision.
What are the legal requirements for an extended auto warranty? The law in Delaware requires that all companies selling such contracts provide consumers with detailed information regarding the coverage. The contract must clearly state that it covers repairs only if the car has a repair problem, and that it does not cover repairs for pre-existing conditions. It also cannot be a condition of buying a vehicle. If a provider does not adhere to these requirements, they could be banned from doing business in the state, and could be fined up to $500 for each violation.
A company selling extended auto warranty plans must be registered with the state and get a license. It must also take out insurance policies to protect its customers against unexpected costs. Each contract must also state which insurer is responsible for paying claims. A company may elect to have a trust account for 5% of its revenue or a fund funded with at least $25,000 to cover claims. Companies with a net worth of $100 million or more are exempt from this requirement.