2022 South Carolina Code of Laws
Title 38 - Insurance
Chapter 78 - Service Contracts
Section 38-78-20. Definitions.
As used in this chapter:
(1) "Administrator" means the person who is responsible for the administration of the service contracts or the service contracts plan or who is responsible for any filings required by this chapter.
(2) "Director" means the Director of the Department of Insurance.
(3) "Consumer" means a natural person who buys other than for purposes of resale any tangible personal property that is distributed in commerce and that is normally used for personal, family, or household purposes and not for business or research purposes.
(4) "Maintenance agreement" means a contract of limited duration that provides for scheduled maintenance only.
(5) "Motor vehicle manufacturer" means a person that:
(a) manufactures or produces motor vehicles and sells motor vehicles under its own name or label;
(b) is a wholly owned subsidiary of the person who manufactures or produces motor vehicles;
(c) is a corporation which owns one hundred percent of the person who manufactures or produces motor vehicles;
(d) does not manufacture or produce motor vehicles, but sells motor vehicles under its trade name label;
(e) manufactures or produces motor vehicles and sells such motor vehicles under the trade name or label of another person; or
(f) does not manufacture or produce motor vehicles but, pursuant to a written contract, licenses the use of its trade name or label to another person that sells motor vehicles under the licensor's trade name or label.
(6) "Nonoriginal manufacturer's parts" means replacement parts not made for or by the original manufacturer of the property commonly referred to as "after market parts".
(7) "Person" means an individual, partnership, corporation, incorporated or unincorporated association, joint stock company, reciprocal, syndicate, or any similar entity or combination of entities acting in concert.
(8) "Premium" means the consideration paid to an insurer for a reimbursement insurance policy.
(9) "Provider" means a person who is contractually obligated to the service contract holder under the terms of the service contract.
(10) "Provider fee" means the consideration paid for a service contract.
(11) "Reimbursement insurance policy" means a policy of insurance issued to a provider to either provide reimbursement to the provider under the terms of the insured service contracts issued or sold by the provider or, in the event of the provider's nonperformance, to pay on behalf of the provider all covered contractual obligations incurred by the provider under the terms of the insured service contracts issued or sold by the provider.
(12) "Service contract" means a contract or agreement for a separately stated consideration for a specific duration to perform the repair, replacement, or maintenance of property or indemnification for repair, replacement, or maintenance, for the operational or structural failure due to a defect in materials, workmanship, 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. Service contracts may provide for the repair, replacement, or maintenance of property for damage resulting from power surges and accidental damage from handling. "Service contract" includes a contract or agreement for a separately stated consideration for a specific duration to perform one or more of the following services:
(a) the repair or replacement of tires and wheels on a motor vehicle damaged as a result of coming into contact with road hazards;
(b) 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 sanding, bonding, painting, or replacing a vehicle body panel;
(c) the replacement of a motor vehicle key or key fob in the event that the key or key fob becomes inoperable, lost, or stolen; and
(d) other services consistent with the provisions of this chapter approved by the director.
(13) "Road hazard" means a hazard that is encountered while driving a motor vehicle including, but not limited to, potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.
(14) "Service contract holder" or "contract holder" means a person who is the purchaser or holder of a service contract.
(15) "Theft protection program" means a device or system installed on or applied to a motor vehicle designed to prevent loss or damage to a motor vehicle from theft that includes a theft protection program warranty. The term "theft protection program" includes, but is not limited to, alarm systems, body-part marking products, steering locks, window etch products, pedal and ignition locks, fuel and ignition kill switches, and electronic, radio, and satellite tracking devices.
(16) "Theft protection program warranty" means a written agreement by a warrantor that provides the warrantor will pay to or on behalf of the warranty holder specified incidental costs not to exceed five thousand dollars as a result of the failure of the theft protection program to prevent loss or damage to a motor vehicle pursuant to the terms of the warranty. Specified incidental costs include expenses specified in the warranty that are incurred by the warranty holder due to the failure of the program to perform as provided in the warranty. Incidental costs include, without limitation, insurance policy deductibles, rental vehicle charges, the difference between the actual value of the stolen vehicle at the time of theft and the cost of a replacement vehicle, sales taxes, registration fees, transaction fees, and mechanical inspection fees. Incidental costs may be reimbursed in a fixed amount specified in the warranty or by use of a formula itemizing specific costs incurred by the warranty holder. A theft protection program warranty must contain a conspicuous disclosure substantially similar to the following in ten-point bold font: "This warranty is not insurance and payments or reimbursement under this warranty may not exceed five thousand dollars."
(17) "Warranty" means a warranty made solely by the manufacturer, importer, or seller of property or services without charge, that is not negotiated or separated from the sale of the product, that is incidental to the sale of the product, and that guarantees indemnity for defective parts, mechanical or electrical breakdown, labor, or other remedial measures, such as repair or replacement of the property or repetition of services. This term includes theft protection program warranties if the warrantor has obtained a reimbursement insurance policy to insure its warranty obligations in this State.
HISTORY: 2000 Act No. 330, Section 2; 2020 Act No. 115 (H.4244), Section 1, eff May 3, 2020.
Effect of Amendment
2020 Act No. 115, Section 1, in (12), added the third sentence and (a) to (d); inserted (13), relating to the definition of "road hazard" and redesignated (13) as (14); inserted (15) and (16), relating to the definitions of "theft protection program" and "theft protection program warranty", respectively; and redesignated (14) as (17) and added the second sentence, relating to theft protection program warranties.
