Consumer Tips from the Service Contract Industry Council for Buying Extended Warranties

TALLAHASSEE, Fla., July 8, 2011 - Legislation signed into law by Missouri Gov. Jay Nixon on July 7, 2011 includes important consumer protection language drafted by the Service Contract Industry Council (SCIC) in conjunction with the Missouri Attorney General and impacts consumers nationwide. The law goes into effect Jan. 1, 2012.

The SCIC believes consumers should know that the great majority of service contract (extended warranty) providers are licensed and regulated in the state(s) in which they do business. In addition, the SCIC wants consumers to know their rights during and after the purchase.


  • Most service contracts are sold by retailers at the point of sale, automotive dealerships, or through a realtor. Service contracts also can be obtained after product or vehicle purchase (new or used vehicles) from independent service contract providers or in some cases by returning to the point of purchase.

    Homeowners may purchase a home service contract at any time, regardless of the age of the home or years of occupancy.

  • The vast majority of service contracts are sold and/or administered by reputable, licensed companies that abide by current regulations, adhere to high principles of customer service, and are protected by financial reserves and/or insurance.
  • A list of service contract providers who are members of the Service Contract Industry Council, a non-profit trade association representing the service contract industry, is available at


  • Ask for a copy of the contract and read the provisions carefully to be sure the terms and benefits fit your needs.
  • Only buy from a provider willing to supply a copy of the contract terms and conditions for your review prior to purchase.
  • Research the provider and/or contract administrator with the local Better Business Bureau and/or state insurance commissioner. As with any vendor, consumers are urged to research the companies with whom they do business.
  • Be alert to providers who use unsolicited mass marketing techniques, such as direct mail and telemarketing (e.g., "robo-calls"), or who misrepresent

themselves. Avoid purchasing a service contract if you feel overly pressured by sales personnel.


  • Read the provisions carefully to become familiar with all coverage, exclusions, and terms and conditions.
  • Most service contracts (extended warranties) come with a 30-day free-look period that gives consumers time to review the details of the contract and receive a complete refund upon cancellation.
  • Carefully fulfill all contract obligations, such as regular fluid and filter changes, milestone maintenance, and other manufacturer-recommended service.
  • Maintain a dedicated file for contract paperwork, receipts, and maintenance records.
  • Use the benefits of the service contract as often as needed and applicable to enhance the life of the covered purchase and maximize its value.
  • Determine if the service contract can be transferred with the sale of the covered purchase. This mostly applies to home and autos and can make the sale more appealing to a potential buyer.

    The Service Contract Industry Council ( works with state legislatures nationwide to increase protections and rights of consumers purchasing service contracts (sometimes known as extended warranties), regulate the licensing of service contract providers, and implement stringent financial safeguards.

    The SCIC's website ( offers additional consumer tips for the following:

    Consumer Electronics and Appliances: http://www.go-

    Home, covers main operating systems and built-in appliances: http://www.go-

    Motor Vehicle, new and used:

    SOURCE Service Contract Industry Council