Insurance: home protection companies

The law allows utility-bill collection for these contracts while requiring clear separation from utility charges, consumer disclosures, cancellation rights, and insurance backing for contract obligations.

What the law does ​

• Creates a California license for organizations acting as home protection contract limited lines agents for utilities and home protection companies.
• Lets qualifying utilities solicit contracts and collect contract fees through utility bills for licensed agents or appointed property and casualty insurance agents.
• Requires bills to identify the contract as third-party issued, separately list its fee, provide agent contact information, and apply payments to utility service charges first.
• Requires marketing disclosures that the contract is optional and bars contract advertisements from appearing directly on utility bills.
• Gives purchasers 30 days to void a contract and receive a full refund if they have made no claim.
• Requires annual renewal notices for recurring bill charges and specified contract disclosures, claims contacts, and alternative payment options.
• Requires home protection companies to maintain insurance covering 100% of their contractual obligations and permits purchasers to claim against that insurer if the company fails to perform within 60 days.
• Authorizes the Insurance Commissioner to license, oversee, penalize, suspend, or revoke involved agents and require corrective action for violations.

Who it affects ​

• Utilities regulated by the California Public Utilities Commission that act as home protection contract vendors.
• Home protection companies, limited lines agents, and property and casualty insurance agents.
• Utility customers who buy or are offered home protection contracts.
• Unlicensed utility-vendor employees, who may perform only clerical or billing work and may not enroll customers or answer contract-specific questions.

Context ​

The chapter becomes operative July 1, 2027.