Service Contract Providers

A Service Contract Provider provides extended warranties to consumers for a specified period of time and for an additional cost beyond the price of the product.

Proposed Administrative Rules

The Texas Department of Licensing and Regulation proposes a new rule and amendments to the Service Contract Providers and Administrators program rules (16 Texas Administrative Code, Chapter 77, new §77.26; and amendments to §77.10 and §77.70).

The proposed rules implement Senate Bill 1199, 85th Legislature, Regular Session (2017), which amended Texas Occupations Code Chapter 1304 and expanded the definition of “service contract” to include agreements that provide compensation to the buyer of a vehicle on the total constructive loss under a depreciation benefit optional member program.

The proposed rules are published in the February 23, 2018, issue of the Texas Register (43 TexReg 985). The Department will accept comments on the proposal until March 26, 2018.

The Department encourages anyone interested in the Service Contract Providers and Administrators program to review the rule proposal online. Comments may be submitted by email to erule.comments@tdlr.texas.gov.

2017 Legislative Update

The 85th Legislative Session made three changes to the SCP statute.

  • Effective September 1, 2017, SCP contracts may offer to replace a motor vehicle key or key-fob if the key or key-fob becomes inoperable or is lost or stolen. See House Bill 2275 for more information.
  • In addition, HB 2275 amended the statute to state that a contract provider is not required to deduct the amount of any claims paid from the amount of a refund requested by a contract holder. This change is also effective September 1, 2017.
  • Senate Bill 1199 allows a SCP contract to a provide compensation to the buyer of a vehicle on the total constructive loss under a “Depreciation benefit optional member program.” A Depreciation benefit optional member program means a service contract financed under Chapter 348 or 353, Finance Code, that pays to the buyer, as a credit toward the purchase of a replacement vehicle at a participating dealer, an amount less than or equal to the difference between the purchase price and the actual cash value for a total constructive loss. There are some important restrictions however.
  • The amended statute will be posted soon.

Military Service Members, Veterans, and Spouses - For more information about obtaining a TDLR license or renewing a TDLR license that expired while serving on active duty, please go to the Military Outreach home page.