Florida licenses vehicle service agreement companies under their own part of Chapter 634

Florida's vehicle service contracts are called "motor vehicle service agreements," and Part I of Chapter 634 of the Florida Statutes governs the companies that issue them. It is a different part of the chapter from the one that covers home warranty associations. This page sets out what Part I provides on licensing, financial backing, contract terms and cancellation.

The short answer

License required, with limited exceptions: a person may not transact, administer or market service agreement business in or from Florida unless authorized by a subsisting license from the Office of Insurance Regulation, and doing so without one is a first-degree misdemeanor. The exceptions include transactions exempt under s. 624.125, certain affiliates of insurers and licensed companies, and a lighter compliance track for vehicle manufacturers.¹ ² ³ ⁸
Money behind the contract: a company needs minimum net assets of $500,000 and either an unearned premium reserve of 50 percent of unearned gross written premium or contractual liability insurance covering 100 percent of claim exposure (generally not both at once, with stated exceptions). It must also keep a deposit with the department (the Department of Financial Services) of at least $200,000 ($100,000 for a company under $750,000 in unearned gross written premium).³ ⁴ ⁸
Cancellation: a purchaser may cancel within 60 days of purchase for 100 percent of the gross premium paid, less claims paid, with an administrative fee of no more than 5 percent. After 60 days a purchaser's cancellation must return at least 90 percent of the unearned pro rata premium, less claims paid.⁶
Not under the rest of the insurance code: the part says these companies are governed by it and exempt from all other provisions of the Florida Insurance Code, except as the part provides.⁹

What a motor vehicle service agreement is

Part I defines a motor vehicle service agreement as a contract or agreement indemnifying the holder, for the motor vehicle listed on it, against loss caused by failure of any mechanical or other component part, or by a part that does not function as originally intended. The part does not prohibit or affect the free usual performance guarantees that manufacturers or dealers give with a sale.¹ The term also includes agreements tied to an additive product, agreements paying vehicle protection expenses, tire and wheel road-hazard repair, paintless dent removal and key or key-fob replacement.¹

A "service agreement company" is a corporation, sole proprietorship or partnership, other than an authorized insurer, that issues motor vehicle service agreements. The statute's definition of "premium" means the total amount paid by the holder and says the company may not charge an assessment, membership fee, policy fee, survey fee, inspection fee, service fee, finance fee or similar fee.¹ The definition of "motor vehicle" covers a self-propelled device operated solely or primarily on roadways, and a self-propelled device operated on water for noncommercial, personal use, with exclusions for certain heavy vehicles, vehicles designed to carry more than 10 passengers, and vehicles used to transport hazardous materials.¹

Licensing and who administers it

Section 634.031 says no person may transact, administer or market the service agreement business, or hold itself out as doing so, in or from Florida unless it has a subsisting license issued by "the office." The Insurance Code defines "office" as the Office of Insurance Regulation of the Financial Services Commission.² ⁸ The office may issue an immediate final order to cease and desist without advance notice or hearing, and a violation of the section is a first-degree misdemeanor.²

Section 634.023 says that, except as the part provides, these companies are governed by Part I and are exempt from all other provisions of the Florida Insurance Code.⁹

The part has exceptions. Section 634.011(8) excludes transactions exempt under s. 624.125.¹ Section 634.031(5) and (6) exempt certain affiliates of a domestic insurer, or of a licensed domestic service agreement company that uses contractual liability insurance, if the person does not issue, market or administer agreements to or for Florida residents, on stated conditions.² Section 634.041(12) says a vehicle manufacturer complying with the part must be an entity formed under the laws of Florida or of another state or district of the United States, need comply only with subsections (2) and (10) of that section, and is subject to all other applicable provisions of the part.³

Financial backing

To qualify for and hold a license, a company must meet the conditions in section 634.041, including a solvent corporation, management shown to be competent and trustworthy, the required deposit, and the required reserves and liquid-asset ratio. It must not have violated the part in the 3 years before applying, and must keep minimum net assets of $500,000, with a transition rule for certain smaller long-licensed companies, all held in the United States.³

Two ways to back contracts under § 634.041(8)
Route	What the statute requires
Unearned premium reserve	Unencumbered assets of at least 50 percent of the unearned gross written premium on each agreement, amortized pro rata over its term, held in cash or in investments the statute permits. The ratio of gross written premium in force to net assets may not exceed 10 to 1. The company must deposit with the department eligible securities equal to 15 percent of the reserve.³
Contractual liability insurance	Coverage of 100 percent of claim exposure from an insurer approved by the office, authorized in Florida (or a qualifying risk retention group), with a surplus as regards policyholders of at least $15 million. If the company does not meet its obligations, the policy binds the issuer to pay holders' legitimate claims and cancellation refunds. The policy may not be canceled, terminated or nonrenewed unless the insurer gives the office 90 days' written notice.³

Under section 634.041(9)(a), a company may not use both the 50 percent reserve and contractual liability insurance simultaneously, but it may have liability coverage on agreements previously sold and sell new agreements covered by the reserve, and the converse, and it must be able to distinguish how each agreement is covered. Under (9)(b), a company with net assets of at least $10 million that annually files audited financial statements may use either the reserve or the liability coverage for specific blocks of new agreements, defined as those sold by a single designated licensed salesperson.³ Separately, section 634.052 requires a company, before licensing, to deposit with the department securities of the type eligible for insurers under s. 625.52 with a market value of not less than $200,000. A company with unearned gross written premium under $750,000 deposits $100,000. After one year the company may request release of part of the deposit, but the deposit may never fall below $100,000. The office may also, after notice and hearing and for good cause, require a larger deposit of between $100,000 and $500,000.⁴ Our guide on reimbursement insurance vs. a funded reserve explains the general difference between the two routes.

Contract terms, assignment and cancellation

Section 634.121 sets rules for the agreement itself.⁶

Selected requirements of § 634.121
Subject	What the statute requires
Pre-sale notice	Before the sale, written notice that buying the agreement is not required to purchase or obtain financing for a vehicle.⁶
Assignment	Agreements are assignable in a consumer transaction and must contain a conspicuous, boldfaced statement of the right to assign to a later retail purchaser. The assignment period may not expire earlier than 15 days after the sale or transfer of the vehicle, and an assignment fee may not exceed $40.⁶
Cancellation by the purchaser	Each agreement must contain a cancellation provision. It is cancelable by the purchaser within 60 days after purchase, for 100 percent of the gross premium paid less claims paid, with a reasonable administrative fee not over 5 percent of gross premium.⁶
Cancellation by the company	After 60 days the company may cancel only for material misrepresentation or fraud at sale, failure to maintain the vehicle as the manufacturer prescribed, tampering with or disabling the odometer without repair, or nonpayment (with notice by certified mail). A company cancellation must return not less than 100 percent of the paid unearned pro rata premium, less claims paid.⁶
Cancellation after 60 days by the holder, lender or creditor	The company must return directly to the holder not less than 90 percent of the unearned pro rata premium, less claims paid. Lender-initiated cancellations are valid only if the agreement authorizes them.⁶
Who refunds	The company remains responsible for full refunds. The salesperson and agent are responsible for refunding the unearned pro rata commission.⁶

Marketing and claims conduct

Section 634.095 lists prohibited acts by a company or salesperson, with a second-degree misdemeanor penalty. They include a written advertisement that does not disclose, in at least 12-point boldface type, the company's name, address and Florida Company Code; a telephone solicitation that does not identify the soliciting salesperson's full legal name and license number; advertising that is false, deceptive or misleading about affiliation with a vehicle manufacturer, possession of information about the owner's factory warranty, its expiration, or a need to register for a new agreement to keep coverage; denying claims for lack of service on parts that do not require servicing; offering a premium return if the holder files no claims or few claims; and "sliding," meaning misrepresenting that an ancillary product is required by law or included at no charge, or charging for one without informed consent.⁵

Salespeople

Salespeople for these companies are licensed and appointed as the statute prescribes for insurance representatives in general, though exempt from all other provisions of chapter 626, including fingerprinting, photo identification, education and examination provisions. A licensed salesperson is directly responsible for the acts of employees and other representatives. A service agreement company does not need a salesperson license to sell its own agreements.⁷

Where this fits in our standard

Point 3 of our standard asks whether state licensing is verified directly with the state's own roster, point 4 asks about a funded-claims mechanism, and point 2 asks about cancellation and refund rights. Florida's Part I gives specific, statute-based answers to each. The Register describes how we apply the points. This page describes a statute, not any provider.

How to verify this yourself

Read sections 634.011 to 634.171 in the 2026 Florida Statutes (references 1 to 7). The Florida Senate site shows the year of each edition.
The statute requires a written advertisement to show the company's Florida Company Code. Use that identifier when you ask the Office of Insurance Regulation to confirm a license.⁵
Check the cancellation terms in your own agreement against section 634.121, including the 60-day window.⁶
Read our vehicle service contract provider verification checklist, which uses a Florida example.

What this page is not

This is general information about the text of a state statute, not legal advice. It does not say whether any company is licensed or compliant, and it does not cover home warranty associations (Part II) or service warranty associations (Part III) of Chapter 634, or the rest of Florida law. Statutes change; confirm the current text before relying on it.

What to do next

If you have a Florida vehicle service agreement, compare its terms to the table above. For the broader picture, see how to compare vehicle service contracts or return to the vehicle warranty hub.