2006 Code of Virginia § 38.2-2621 - Required disclosures regarding home service contracts

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, andshall disclose the requirements set forth in this section, as applicable.

B. Home service contracts insured under a reimbursement insurance policypursuant to subdivision E 1 of 38.2-2619 shall contain a statement insubstantially the following form: "Obligations of the provider under thishome service contract are insured under a home service contract reimbursementinsurance policy." The home service contract shall also state the name andaddress of the insurer.

C. Home service contracts not insured under a reimbursement insurance policypursuant to subdivision E 1 of 38.2-2619 shall contain a statement insubstantially the following form: "Obligations of the provider under thishome service contract are backed by the full faith and credit of theprovider."

D. Home service contracts shall state the name, telephone number, and addressof the provider, and shall identify any administrator if different from theprovider, the home service contract seller, and the home service contractholder to the extent that the name of the home service contract holder hasbeen furnished by the home service contract holder. The identities of suchparties are not required to be preprinted on the home service contract andmay be added to the home service contract at the time of sale.

E. Home service contract providers shall provide a written notice to thecontract holder advising that if he is unable to contact or obtainsatisfaction from the home service contract provider that he may contact theCommission and shall provide the appropriate address and toll-free telephonenumber.

F. Home service contracts shall state the total purchase price and the termsunder which the home service contract is sold. The purchase price is notrequired 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 beprovided and any limitations, exceptions, or exclusions.

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

J. 1. Home service contracts shall state the terms, restrictions orconditions governing cancellation of the home service contract prior to thetermination or expiration date of the home service contract by either theprovider or the home service contract holder. However, no home servicecontract provider shall cancel a home service contract during the initialterm of the contract except for (i) nonpayment of provider fees, (ii) fraudor misrepresentation of material facts, or (iii) in the case of contractsproviding 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 providershall mail a written notice to the contract holder at the last known addressof the home service contract holder contained in the records of the providerat least five days prior to cancellation. Notice of cancellation shall be inwriting and shall state the effective date of the cancellation and the reasonfor the cancellation. Prior notice is not required if the reason forcancellation is nonpayment of the provider fee, material misrepresentation bythe home service contract holder to the provider, or a substantial breach ofduties by the home service contract holder relating to the covered item orits use.

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

L. Home service contracts shall state whether or not the home servicecontract provides for or excludes consequential damages or pre-existingconditions, if applicable. Home service contracts may, but are not requiredto, cover damage resulting from rust, corrosion, or damage caused by anoncovered part or system.

M. If prior approval of repair work is required, a home service contractshall state the procedure for obtaining prior approval and for making aclaim, including a toll-free telephone number for claim service and ifoffered, a procedure for obtaining emergency repairs performed outside ofnormal business hours.

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

(2006, c. 634.)