New Arizona Law Gives Drivers Peace of Mind on the Roads

Arizona’s vehicle owners who are interested in a service contract – a product similar to an extended warranty – will benefit greatly from new state new law that took effect last week on Aug. 3.

The law, which was championed by the Service Contract Industry Council and enacted via Arizona Senate Bill 1381, clarifies that service contracts may cover normal wear and tear, accidental damage from handling, and power surges on a variety of consumer products, including electronics, home appliances, HVAC systems, and motor vehicles.  Additionally, it is made clear that contracts to repair or replace tires and wheels for damage from road hazards; contracts for paintless dent repair services; and contracts to replace lost or stolen vehicle key-fobs will be subject to regulation under Arizona’s existing service contract regulatory framework. Arizona joins more than 30 other states with similar laws in place.

“When one in four people can’t cover an emergency of $400 or more, you see why it is crucial that service contracts are an effective option,” said Tim Meenan, executive director of SCIC. “Consumers need access to products that provide the coverage they need, that’s why our association has worked tirelessly for the passage of this important legislation that protects consumers and fairly regulates the service contract industry.”

A service contract provides consumers an efficient and economical way of maintaining a vehicle, home, or electronic device for long-term ownership, particularly after the manufacturer’s limited warranty expires. In addition, the increased complexity of components and technology in today’s motor vehicles and appliances means greater financial implications when a breakdown occurs.

Most service contracts are sold during the point of sale, but consumers can purchase one from the dealer or independent provider after buying the product, too. This law affects Arizona residents who buy a service contract on Aug. 3 and beyond.