Last reviewed: 7 October 2026
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United StatesMaine: for contracts the chapter covers, providers must register and show how they will pay claims, and a contract must offer a return period
Maine's Service Contracts Act (Title 24-A, Chapter 91 of the Maine Revised Statutes) says the service contracts it governs are not insurance if the provider and administrator register with the Superintendent of Insurance. It also sets two ways to show a provider can pay claims, what a contract must say, and a return and cancellation rule. This page sets out what the text provides.
The short answer
- Registered, not licensed: providers and administrators register with the Superintendent of Insurance and pay an annual fee. A license under the insurance code is not otherwise required to sell service contracts, and contracts under the chapter are exempt from the insurance laws except as the chapter says. A contract indemnifying for loss caused by misplacement, theft, collision, fire or other perils typically covered by comprehensive automobile, homeowner's or marine policies is not within the "not insurance" rule (§ 7102(11)). A manufacturer's own vehicle contracts follow only the sections § 7101(4)(B) lists. 1
- Backing: a provider either insures all its contracts under a reimbursement insurance policy from an insurer or risk retention group meeting stated capital tests (at least $15,000,000, or at least $10,000,000 with a 3 to 1 premium-to-surplus limit), or keeps a tangible net worth of at least $100,000,000 alone or with its parent. 1
- Return and cancellation: a holder may return a contract within 20 days of mailing (10 days from delivery if delivered at sale) for a full refund if no claim was made. Later, the refund is 100% of the unearned pro rata fee less claims paid, with an administrative fee of no more than 10%. 1
- Home service contracts: the chapter lists home service contracts under section 3, subsection 3 among the contracts it does not apply to. 1 2
What the chapter covers
The chapter is titled the Service Contracts Act, and its stated purpose is "to create a legal framework within which service contracts may be sold in this State."1 It defines a service contract as a contract for a separately stated consideration for a specific duration to perform the repair, replacement or maintenance of property, or to indemnify for it, for an operational or structural failure of any motor vehicle or other property due to a defect in materials or workmanship or normal wear and tear. The definition lists several vehicle add-ons, such as tire and wheel road-hazard coverage, paintless dent removal and key replacement.1
The statute's definition of the provider is "a person who is contractually obligated to a service contract holder under the terms of a service contract." The administrator is the person responsible for administering a service contract program or for any submission the chapter requires.1 A provider may, but need not, appoint an administrator, and every administrator of service contracts sold in Maine must register.1
Not insurance, but registered
Contracts governed by the chapter "are not insurance and are not required to comply with any provision of the insurance laws of this State" other than as the chapter says, "as long as the service contract provider and administrator have registered with the superintendent."1 A provider or administrator applies on a form the Superintendent of Insurance prescribes, giving its name, full business address, telephone number and contact person and naming an agent in Maine for service of process. The fee is paid at initial registration and every year after, and the chapter points to section 601, subsection 30 for its amount.1 A service contract may not be issued, sold or offered for sale unless the provider has registered, given the holder a receipt or other written evidence of purchase, and given the holder a copy of the contract within a reasonable time.1
A registrant whose registration has ended must send notice within 15 days to all in-force holders (if a provider, which must also stop issuing new contracts and may not renew existing ones except under a run-off plan the Superintendent approves) or to the providers it serves and their holders (if an administrator).1
How a provider shows it can pay claims
Under section 7103, subsection 5, the provider must either insure all its contracts under a reimbursement insurance policy filed with the Superintendent, or meet a net worth test.1
| Route | What the statute says |
|---|---|
| Reimbursement insurance policy | Insure all service contracts under a policy filed with the Superintendent and issued by a casualty insurer authorized in Maine, a risk retention group registered with the Superintendent, or an eligible surplus lines insurer that agrees in writing to comply with the chapter. The insurer or group must keep surplus as to policyholders and paid-in capital of at least $15,000,000 and file annual audited statements, or keep at least $10,000,000 with a ratio of net written premiums to that capital of no more than 3 to 1 and file the same annual materials.1 |
| Net worth | The provider, alone or with its parent company, keeps a tangible net worth of at least $100,000,000 and, on request, gives the Superintendent its or its parent's latest Form 10-K or Form 20-F or audited financial statements. If a parent's filings are used, the parent must agree on an approved form to guarantee the provider's Maine obligations.1 |
Subsection 6 adds that, apart from subsections 4 and 5, the Superintendent may not require other financial security of providers.1 A reimbursement insurance policy must unconditionally obligate the insurer to reimburse or pay on the provider's behalf any sums the provider is legally obligated to pay, including refunds of unearned provider fees. It must provide that if a covered service is not provided within 60 days of proof of loss, or unearned fees are not returned within 60 days of a valid refund request, the holder may apply directly to the insurer.1
What the contract must say
| Subject | What the statute requires |
|---|---|
| Language | Clear and understandable, in a font size easily readable by a person with average eyesight. A provider may satisfy the font rule by directing the consumer to a publicly accessible website with a complete sample of the terms.1 |
| Who backs it | If insured under a reimbursement policy, a statement in substantially the statutory form, including that the holder may claim directly against the insurer if the provider fails to pay or provide service within 60 days after proof of loss, plus the insurer's name and address. If not insured, a statement that the provider's obligations "are backed by the full faith and credit of the provider and are not guaranteed under a service contract reimbursement insurance policy."1 |
| Parties and price | The name and address of the provider, the seller and the administrator if different from the provider; the total purchase price and terms of sale. The seller and holder identities and the price may be added at the time of sale.1 |
| Claims | The prior-approval procedure and claims procedure, including a toll-free number and a way to get emergency repairs outside business hours; any deductible.1 |
| Coverage and exclusions | The merchandise and services provided and any limitations, exceptions or exclusions; whether consequential damages and preexisting conditions are provided for or excluded; for a motor vehicle, whether nonoriginal manufacturer's parts are allowed.1 |
| Transfer, duties, cancellation | Any transfer restrictions, all the holder's obligations and duties, and the terms governing cancellation by either side.1 |
| Sample before sale | A provider must make a complete sample copy of the terms and conditions available for a consumer's inspection before the time of sale.1 |
Returning or cancelling a contract
A contract must let the holder return it within 20 days of the date it was mailed to the holder, or within 10 days of delivery if delivered at the time of sale, or within a longer period the contract permits. If no claim was made, the contract is void and the provider must refund the full provider fee and any sales tax refund state law requires. A monthly penalty of 10% of the provider fee outstanding is added to a refund not paid or credited within 45 days after return.1 After that period, or if a claim was made, the holder may cancel and the provider must refund 100% of the unearned pro rata provider fee, less claims paid; the provider may charge an administrative fee of no more than 10% of the provider fee paid.1
If the provider cancels, section 7105 requires a written notice mailed at least 15 days before cancellation, stating the effective date and reason. If the reason is other than nonpayment, the provider refunds 100% of the unearned pro rata provider fee less claims paid, and may charge an administrative fee of no more than 10%.1
Practices the chapter prohibits
Section 7110 bars a person from certain acts in marketing, selling or administering service contracts.1 Examples it lists include misrepresenting contract terms or benefits, or the financial condition of a provider; specified claims practices "in conscious disregard of this section" or with such frequency as to indicate a general business practice, such as refusing to pay claims without a reasonable investigation or failing to give an accurate explanation of a denial; and using the words "insurance," "casualty," "surety" or "mutual" in a provider's name (the word "guaranty" may be used). A provider already using such words in its name before January 1, 2012 is not barred, but its contracts must state: "This agreement is not subject to regulation as an insurance contract." A bank, lender, manufacturer or seller of any product may not require the purchase of a service contract as a condition of a loan or sale of property.1 For vehicle service contracts, a provider or its representative may not misrepresent its affiliation with a motor vehicle manufacturer, its possession of information about the owner's manufacturer warranty, that warranty's expiration, or a requirement to register for a new contract to keep existing coverage.1
What the chapter leaves out
Section 7101, subsection 3 lists service contracts that "are exempt from the provisions of this Title, including the other provisions of this chapter." Subsection 4 limits how the chapter applies to two more groups.1
| Item | Treatment |
|---|---|
| Warranties; maintenance agreements | Exempt (subsection 3, paragraphs A and B).1 |
| Utility transmission-device warranties, contracts or agreements | Exempt to the extent regulated by the Public Utilities Commission (paragraph C).1 |
| Contracts sold to persons other than consumers | Exempt (paragraph D).1 |
| Contracts on property with a purchase price of $100 or less, exclusive of sales tax | Exempt (paragraph E).1 |
| Road or tourist service contracts under section 3, subsection 2 | Exempt (paragraph F).1 |
| Home service contracts under section 3, subsection 3 | Exempt from Title 24-A, including the rest of this chapter (paragraph G). Section 3 describes a home service contract as one in which, for a set fee and specified duration, a person agrees to defray or arrange the cost of repair or replacement of any structural component, appliance or system of a home necessitated by wear and tear, deterioration or inherent defect, or failure of an inspection to detect it, and lists it among contracts "not considered insurance."1 2 |
| Warranties, contracts and agreements tied to the sale or supply of heating fuel | Exempt (paragraph H).1 |
| Contracts a licensed motor vehicle dealer is obligated to perform, sold in connection with a vehicle sale or service | Exempt only from the section 7103, subsection 5 backing requirement; must comply with the rest (subsection 4, paragraph A).1 |
| A motor vehicle manufacturer's contracts on its own products | Must comply only with the sections the statute lists (subsection 4, paragraph B).1 |
So a Maine home service contract is outside this chapter by its own terms. This page does not address any other Maine law that might apply to one.
Enforcement
The Superintendent may investigate and examine providers, administrators and insurers, assess civil penalties or take other action under section 12-A, and suspend, revoke or refuse a registration after notice and a 30-day correction period.1 The chapter also requires providers to keep records, including copies of each contract type sold and claims files, for at least 3 years after coverage expires.1
Where this fits our standard
Points 3 and 4 of our standard ask whether state registration is verified directly and whether a funded-claims mechanism is checked where a state requires one. Maine's registration and the two backing routes above are what those points would look at for a contract covered by this chapter. The Register describes a method, not a verdict on any company.
How to verify this yourself
- Open the chapter (reference 1) and read sections 7101, 7103, 7104 and 7105. Every Maine figure above comes from them.1
- Section 7105 requires a contract to carry one of two statutory statements on who backs it.1
- This page does not describe what the Superintendent's office will confirm about a particular provider's registration; ask it directly.
What this page is not
This is general information about the text of one state's chapter, not legal advice. It does not say whether any contract or provider meets the chapter. The text was current through October 1, 2025 according to the legislature's own publication; statutes change, so confirm the current text before relying on it.
What to do next
The tables above summarize the statute. For general guides, see how to verify a home warranty company and how to verify a vehicle service contract provider, or start from the state regulation hub.