California and Missouri Expand Vehicle Service Contracts
On September 16, California Governor Jerry Brown signed AB 2354, a bill that expands the definition of a “vehicle service contract” to include agreements to repair, replace, or maintain any of the vehicle’s mechanical components, conditioned upon the use of a specific lubricant, treatment, fluid, or additive. The law goes into effect on January 1, 2017. In similar fashion, the Missouri legislature recently voted to override the Governor’s veto of HB 1976, thus expanding the definition of “extended service contracts” to include tire and wheel replacement, dent repair, key and key fob replacement, and other ancillary services as approved by the Director of Insurance. The Missouri law will also eliminate the requirement that a provider pay a full refund to the contract holder if the contract is cancelled during the initial 20-day period, providing instead the option to give a credit to the contract holder or a specified designee.