All Roll Calls
Yes: 138 • No: 0
IowaHF 275691st General Assembly (2025–2026)HouseWALLET
A bill for an act relating to licensing of service companies, motor vehicle service contracts, and residential service contracts, and providing civil penalties and including effective date provisions. (Formerly HF 2714, HSB 517.) Effective date: 01/01/2027.
Sponsored By: COMMITTEE ON WAYS AND MEANS
Signed by Governor
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Bill Overview
Analyzed Economic Effects
9 provisions identified: 5 benefits, 1 costs, 3 mixed.
Faster emergency repairs for covered homes
Beginning January 1, 2027, companies must start qualifying home repairs or replacements within 48 hours after a claim is reported. This covers total loss of heating, cooling, or plumbing, or substantial electrical loss, when essential to household health and safety. Companies must finish as soon as reasonably possible. If finishing within three calendar days is impracticable, a status report is due within three calendar days of the claim. It must explain needed work, estimated costs, delays, completion timing, and contact details; companies must answer inquiries within one business day.
Refund protections for service contract buyers
Beginning January 1, 2027, original buyers get at least 30 calendar days after coverage starts to cancel. They receive a full purchase-price refund if no claim has been paid; contracts can allow a longer cancellation period. Other buyer cancellations receive refunds based on unused time or mileage, minus paid claims. The same refund rule covers company cancellations except for nonpayment, and any administrative fee is capped at 10% of the total price. Refunds unpaid after 30 days add 10% of the original refund each month, subject to exceptions, including missing information needed from the holder.
Unlicensed sellers cannot provide enforceable contracts
Beginning January 1, 2027, contracts sold or issued in Iowa by companies unlicensed at that time are void and unenforceable. This blocks enforceable contracts from unlicensed providers, but also prevents buyers from enforcing the promised coverage. This provision does not provide replacement coverage or a specific refund guarantee.
Clearer terms for service contract buyers
Beginning January 1, 2027, Iowa's rules cover self-powered vehicles subject to state registration and residential service contracts. Home contracts can include power surges, roof leaks, accidental damage, normal wear, and defects; companies need not cover every risk. These contracts are not insurance. Buyers must get a receipt, a complete sample before purchase, and a signed contract within 10 business days; requested paper copies can cost extra. Contracts must use plain language and at least eight-point type, identifying the company, administrator, holder, price, payment terms, waiting periods, deductibles, coverage, replacement-part rules, transfer rights, claims steps, toll-free service number, and cancellation methods. They must explain maintenance duties, protection against further damage, service-call fees, coverage or exclusions for preexisting problems and related damage, and state complaint contacts. Insured contracts must identify the insurer and explain direct claims and its payment duty 60 days after proof of loss; uninsured contracts must identify company backing.
Fairer sales and claims for buyers
Beginning January 1, 2027, service companies and support services cannot mislead buyers about manufacturer ties, warranties, or coverage. They cannot call these contracts insurance. Licensed companies must try in good faith to settle claims promptly and fairly, identify themselves in ads, and avoid threats, misleading marketing, and unfiled forms. Written claim denials and compromise offers must explain how to complain to the Iowa insurance division and provide its complaint-form website. Violations of the law's contract and prohibited-practice requirements also count as unlawful practices under state consumer protection law.
Stronger enforcement against abusive service companies
Beginning January 1, 2027, the commissioner can immediately suspend licenses for insolvency, specified delinquency proceedings, or imminent public threats. Companies can request a hearing; other discipline covers fraud, unfair practices, repeated poor performance, financial failures, unfiled forms, and judgments unpaid after 60 days. After a hearing, violations can bring stop orders and fines up to $1,000 each, capped at $10,000 total. Knowing violations, including those a person reasonably should know about, can bring $5,000 each, capped at $50,000 in any consecutive six months. Employers or companies also face penalties when they direct, encourage, condone, ignore, or approve violations. Investigators can require testimony and records, and enforcement continues after a license lapses or is surrendered.
Tighter licensing rules for service companies
Beginning January 1, 2027, Iowa requires licenses to issue, offer, or sell vehicle or home service contracts. Support-service providers are exempt, but licensed companies remain responsible for their compliance. Applications must document company finances, Iowa business authority, contract forms, executives, owners above 10%, and five years of disciplinary history. Out-of-state applicants also need home-state good-standing certification dated no more than 30 calendar days after applying. Licenses last one year; renewal is due by August 31, with applications filed at least 90 calendar days before expiration. Renewals require company information, current forms, fees, and prior-year contract activity; expired license holders cannot offer, extend, or renew contracts. Companies must keep licenses while contract duties remain unless the commissioner orders otherwise after a hearing. Material changes and specified final administrative decisions must be reported within 30 calendar days; qualifying owner or officer prosecutions require reporting within 30 calendar days of the initial pretrial hearing.
Private investigations with limited public disclosures
Beginning January 1, 2027, service-company investigation, examination, and inquiry records are generally confidential, overriding state public-records rules. The commissioner can share information with the investigated company and complaining consumer, or disclose it in administrative or court proceedings. Sharing with other government agencies or publishing company information requires a finding that disclosure serves the public interest. The commissioner can also publish company names, addresses, phone numbers, and license status.
Company fees with contract form grace
Beginning January 1, 2027, service companies pay $500 to apply and $200 for annual renewal. Renewal also costs 3% of prior-calendar-year Iowa residential contract payments minus refunds, with that additional charge capped at $50,000. Renewing after expiration adds $800; license and filing fees support a service company oversight fund. All contract forms must be filed before use; new or changed vehicle forms cost $35, except contact-information-only changes. Unchanged forms filed before January 1, 2027, can remain in use until January 1, 2028, even without meeting the new requirements.
Sponsors & Cosponsors
Sponsor
COMMITTEE ON WAYS AND MEANS
Affiliation unavailable
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
Senate vote • 5/2/2026
Passed Senate
Yes: 46 • No: 0
House vote • 4/8/2026
Passed House
Yes: 92 • No: 0
Actions Timeline
Signed by Governor.
6/2/2026HouseReported correctly enrolled, signed by Speaker and President, and sent to Governor.
5/18/2026HouseMessage from Senate.
5/2/2026HouseImmediate message.
5/2/2026SenatePassed Senate, yeas 46, nays 0.
5/2/2026SenateSubstituted for SF 2505.
5/2/2026SenateAttached to SF 2505.
5/2/2026SenateRead first time, passed on file.
4/9/2026SenateMessage from House.
4/9/2026SenateImmediate message.
4/8/2026HousePassed House, yeas 92, nays 0.
4/8/2026HouseAmendment H-8324 adopted.
4/8/2026HouseAmendment H-8324 filed.
4/7/2026HouseIntroduced, placed on Ways and Means calendar.
4/6/2026House
Bill Text
As Introduced
Enrolled
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