CaliforniaCalifornia licenses organizations selling home repair contracts through utilities
Starting July 1, 2027, organizations arranging home protection contracts through utility vendors must be licensed, and customers gain new billing and cancellation protections.
What it does
Starting July 1, 2027, organizations that arrange home repair or replacement contracts for a company through utility vendors must get a state license. Utilities may solicit contracts or collect fees only through an authorized vendor.
Utility bills must identify the outside company and show its fee separately from utility charges. Customers may switch how they pay and may get a full refund by returning an unused contract within 30 days.
Home protection companies must maintain insurance covering all contract obligations. Customers may seek payment from the insurer if the company fails to meet an obligation within 60 days after receiving proof of loss and the customer gives written notice.
Argument forCustomers could recover the full price of an unused contract by asking to cancel it within 30 days, as long as they have made no claim.
Argument againstCustomers may have to contact a separate company or licensed agent for answers because utility vendors and their unlicensed employees generally cannot answer contract questions.
More detail
Beginning July 1, 2027, the state will license organizations that arrange home protection contracts for companies in connection with utility vendors. The license is for an organization acting for a home protection company in connection with a utility vendor. A utility may solicit contracts or pass along fees only when acting as a vendor for a licensed limited lines agent or a property and casualty agent appointed by a home protection company. An agent may authorize a vendor to solicit contracts and collect fees only if the vendor meets the listed conditions. Vendor employees without insurance licenses generally may do clerical or billing work, but may not enroll customers or answer contract questions. The new chapter becomes operative on July 1, 2027.
The law sets requirements for utility bills that collect contract fees and gives customers contract cancellation and payment choices. These rules apply when a utility vendor collects home protection contract fees through the utility bill. Bills must identify the third party issuing the contract, show its fee separately from utility charges, and provide a phone number for questions. Payments must go first to utility charges. Customers paying through a utility bill must be told how to choose another payment method. A customer may get a full refund by asking to void the contract within 30 days of purchase, if no claim has been made. The 30-day return period begins on the purchase date.
Home protection companies must maintain insurance covering their contract obligations under this chapter. The insurance requirement applies to home protection companies transacting contracts under this chapter. Generally, the policy must be approved by the commissioner before use and meet insurer strength and capital requirements. The law also allows a policy covering all of the company's obligations in California, with a copy provided with its annual statement. A customer may seek payment from the insurer if the company fails to meet an obligation within 60 days after the customer submits proof of loss and the customer gives the insurer written notice. If coverage ends without replacement, the company must stop vendor sales and marketing until approved coverage is filed; utility-bill fee collection must end within 180 days after cancellation unless replacement coverage takes effect and is acknowledged. The chapter, including this insurance requirement, becomes operative July 1, 2027.
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Where it stands
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 27Chaptered by Secretary of State - Chapter 561, Statutes of 2026.Latest
- Sep 27Approved by the Governor Gavin Newsom.Became Law
- Sep 3Enrolled and presented to the Governor at 4 p.m.To Governor
- Aug 26Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 6636.).Major
- Vote recorded AB 1931 Papan Concurrence in Senate Amendments. Result: pass.Lower
- Vote recorded 3rd Reading AB1931 Papan By Padilla. Result: pass.Upper
- Aug 26In Assembly. Concurrence in Senate amendments pending.
- Aug 26Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0.).Passed Senate
- Aug 24Read second time. Ordered to third reading.Minor
- Aug 20Read third time and amended. Ordered to second reading.Major
- Aug 17Read second time. Ordered to third reading.Minor
- Aug 13Read second time and amended. Ordered returned to second reading.Major
- Vote recorded Do pass as amended. Result: pass.Upper
- Aug 13From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) (August 13).Major
- Aug 3In committee: Referred to APPR. suspense file.Minor
- Vote recorded Placed on suspense file. Result: pass.Upper
- Jun 25From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 0.) (June 24). Re-referred to Com. on APPR.Minor
- Jun 24
- Vote recorded Do pass, but first be re-referred to the Committee on [Appropriations]. Result: pass.Upper
- Jun 18From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS.Major
- Jun 3Referred to Com. on INS.Minor
- May 21In Senate. Read first time. To Com. on RLS. for assignment.Minor
- Vote recorded AB 1931 Papan Assembly Third Reading. Result: pass.Lower
- May 21Read third time. Passed. Ordered to the Senate. (Ayes 72. Noes 0. Page 5204.)Passed Assembly
- May 18Read second time. Ordered to third reading.Minor
- May 14From committee: Do pass. (Ayes 14. Noes 0.) (May 14).Minor
- Vote recorded Do pass. Result: pass.Lower
- May 6In committee: Set, first hearing. Referred to APPR. suspense file.Minor
- Apr 22From committee: Do pass and re-refer to Com. on APPR. (Ayes 16. Noes 0.) (April 22). Re-referred to Com. on APPR.Minor
- Vote recorded Do pass and be re-referred to the Committee on [Appropriations]. Result: pass.Lower
- Apr 20Re-referred to Com. on INS.Minor
- Apr 16From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.Major
- Apr 16Re-referred to Com. on INS.Minor
- Apr 15From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.Major
- Mar 2Referred to Com. on INS.Minor
- Feb 14From printer. May be heard in committee March 16.
- Feb 13Read first time. To print.Introduced
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