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<ns0:Id>20250SB__122499INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-19</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Jones</ns0:AuthorText>
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<ns0:House>SENATE</ns0:House>
<ns0:Name>Jones</ns0:Name>
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<ns0:Title> An act to amend Section 12740 of the Insurance Code, relating to insurance. </ns0:Title>
<ns0:RelatingClause>insurance</ns0:RelatingClause>
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<ns0:Subject>Home protection contracts.</ns0:Subject>
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<html:p>Existing law regulates home protection companies that issue home protection contracts, as defined, to repair or replace components, systems, and appliances of a home for a specified period of time. Existing law requires the contract to provide a system of service for effectuating a repair or replacement of the system, component, or appliance.</html:p>
<html:p>This bill would require the contract to also include a system of service for allowing reimbursement and cash in lieu of repair or replacement of the system, component, or appliance.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 12740 of the
<ns0:DocName>Insurance Code</ns0:DocName>
is amended to read:
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<ns0:Num>12740.</ns0:Num>
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<html:p>The definitions used in this section govern the construction and terms used in this part but shall not affect any other provisions of this code:</html:p>
<html:p>
(a)
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“Home protection contract” means a contract or agreement whereby a person, other than a builder, seller, or lessor of the home which is the subject of the contract, undertakes for a specified period of time, for a predetermined fee, to repair or replace all or any part of any component, system, or appliance of a home necessitated by wear and tear,
deterioration, or inherent defect, arising during the effective period of the contract, and, in the event of an inspection conducted pursuant to subdivision (b) of Section 12761, by the failure of that inspection to detect the likelihood of any such loss.
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<html:p>The contract shall provide for a system of service for effectuating repair or
replacement, reimbursement, and cash in lieu of repair or replacement, and shall not include protection against consequential damage from the failure of any component, system, or appliance.</html:p>
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(b)
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“Home protection company” means any person licensed pursuant to this part which issues home protection contracts.
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<html:p>
(c)
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“Protection contract fee” means the consideration received, or to be received, by a home protection company for the issuance of any home protection contract.
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<html:p>A home protection contract fee shall be the fee established by a home protection company for coverage extending one year from the effective
date of the contract. Where initial coverage is provided for a period in excess of one year, the home protection contract fee shall be the annual fee, plus a separately stated pro rata portion of the annual fee for the period of coverage which exceeds one year.</html:p>
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(d)
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“Home” or “residential property” as used in this part means any single or multiple unit or units, including mobilehomes, as defined in Section 18211 of the Health and Safety Code, used primarily for residential purposes.
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