FL H0925

Home warranty associations must maintain premium reserve accounts as separate auditable accounts, with minimum reserves of 25% of gross written premiums (or 40% if net assets are below $500,000).

Service warranty associations must also maintain premium reserve accounts as separate auditable accounts and comply with the same financial requirements as home warranty associations.

Home warranties cannot exclude coverage due to rust or corrosion unless the rust or corrosion caused the mechanical breakdown or failure of the covered appliance, unit, or system.

Home warranty contracts covering HVAC system wear and tear that exclude functional component replacement for compatibility or efficiency reasons must provide conspicuous disclosure and allow consumers to purchase additional coverage for those scenarios.

Warranty associations operating in Florida and issuing contracts in other states must comply with all financial requirement laws of those other states; most provisions take effect July 1, 2019, with HVAC requirements effective January 1, 2020.