WashingtonHB 10062025-2026 Regular SessionHouseWALLET

Regulating service contracts and protection product guarantees.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 4 benefits, 0 costs, 0 mixed.

Injured contract holders can sue insurers

Service contract and protection product guarantee holders injured by a violation can bring a Washington Consumer Protection Act case. You can sue the provider and each insurer that issued an applicable reimbursement insurance policy. The law does not set a specific recovery amount.

Insurance helps buyers when providers fail

Reimbursement insurance can pay covered amounts or provide promised services when a service contract or product guarantee provider fails. Providers can use multiple policies covering all obligations or only provider defaults. With default-only coverage, you can claim directly after 30 days without the promised service or product, counted from proof of loss; no wait applies if the provider stops operating. Your payment to a seller, provider, or administrator counts as payment to each insurer, and administrators must identify additional providers to insurers. Each policy used to meet the state’s financial backing requirement must be filed with and approved by Washington’s insurance commissioner.

Refund rights for nonvehicle contract buyers

Original buyers of covered nonvehicle service contracts and protection product guarantees can return them for a full refund or account credit. You must return yours within 20 days after mailing or 10 days after delivery at sale, without making a claim. A longer return period applies if the contract provides one. The provider must refund or credit you within 30 days after return; late refunds or credits carry a 10% monthly penalty. This return right does not cover motor vehicle service contracts.

Financial backing for buyers’ service contracts

Vehicle service contract providers and protection product guarantee providers must meet one of three financial backing options. The insurance option requires an insurer with at least $15 million in capital and surplus, checked annually. An approved insurer with $10 million to $15 million qualifies only with a written-premiums-to-surplus ratio no higher than 3-to-1. The reserve option requires at least 40% of fees received minus claims paid, plus a security deposit of at least 5% of fees received minus claims paid, with a $25,000 minimum. The third option requires $100 million in net worth, backed by financial statements; a qualifying parent company must guarantee the provider’s obligations. Protection product providers also need valid registration before sales, and uninsured vehicle contracts must state that the provider itself backs its promises.

Sponsors & Cosponsors

Sponsor

Cindy Ryu
Democratic • House

Cosponsors

Kristine Reeves
Democratic • House
Stephanie McClintock
Republican • House

Roll Call Votes

All Roll Calls

Yes: 144 • No: 0

Senate vote • 4/5/2025

3rd Reading & Final Passage

Yes: 48 • No: 0 • Other: 1

House vote • 1/30/2025