Last reviewed: 3 October 2026
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United States (Texas)Can a Texas service contract provider cancel your contract, and what notice is required?
This page covers one state: Texas. It explains what the Texas Department of Licensing and Regulation (TDLR), the state licensing agency, says about a provider cancelling a service contract: the notice, the exceptions and the refund. TDLR's page does not address a provider refusing to renew a contract. Other states' rules on either point are not covered here, and they differ. This is general information, not advice.
The short answer
- Yes, in Texas a provider may cancel. TDLR says "A provider may cancel a contract, but the reasons for doing so and whether you can obtain a refund is determined by when you bought your service contract."1
- Notice, for a contract bought on or after January 1, 2012: the provider mails a written notice to your last known address. TDLR says it "must mail the notice before the fifth day preceding the effective date of the cancellation." The notice must state the effective date and the reason.1
- No prior notice is required in three cases (contracts bought on or after January 1, 2012): nonpayment by you; fraud or a material misrepresentation by you to the provider or its administrator; or a substantial breach of a duty by you relating to the covered product or its use.1
- Refund (contracts bought on or after January 1, 2012): if the provider cancels, TDLR says it must give you a prorated refund of the purchase price for the remaining term, decreased by claims paid. It may not charge a cancellation fee.1
- Not renewing: TDLR's page does not say whether a provider may decline to renew your contract. Read your contract.
Which rules apply depends on the purchase date
TDLR gives separate rules for contracts bought before January 1, 2012 and on or after that date.1
| Topic | Bought on or after January 1, 2012 | Bought before January 1, 2012 |
|---|---|---|
| How the provider cancels | Mails a written notice to your last known address in the provider's records. The notice must state the effective date and the reason.1 | Mails a written notice to your last known address in the provider's records. The notice must state the effective date and the reason.1 |
| Timing of the notice | Mailed "before the fifth day preceding the effective date of the cancellation."1 | Mailed "before the fifth day preceding the effective date of the cancellation."1 |
| When no prior notice is required | Nonpayment by you; fraud or a material misrepresentation by you to the provider or the provider's administrator; a substantial breach of a duty by you relating to the covered product or its use.1 | Nonpayment by you; a material misrepresentation by you to the provider; a substantial breach of a duty by you relating to the covered product or its use.1 |
| Refund | A prorated refund of the purchase price reflecting the remaining term, "based on mileage, time, or another reasonably applicable measure of the remaining term that must be disclosed in the contract," decreased by claims paid. No cancellation fee.1 | TDLR's page does not set out a refund rule for this case. It points to Occupations Code section 1304.159.1 |
The wording "before the fifth day preceding the effective date" is TDLR's. To count the days, read section 1304.159, which TDLR cites. This page does not reproduce that statute.
If you get a cancellation notice
- TDLR says "Your service contract should state the terms and requirements for the provider cancelling your contract." Check the notice against your contract.1
- TDLR suggests contacting the provider first. It says the provider is required to give you its complaint resolution procedures. If you cannot resolve the problem, you may file a complaint with TDLR online, with Complaint Form #007 ALL, or by calling (800) 803-9202 (Texas only) or (512) 463-6599.1
- TDLR says you can search its website for final enforcement actions against providers and administrators, selecting "Service Contract Providers" as the license type.1
Non-renewal: what TDLR's page does and does not say
TDLR's FAQ has a section on "renewal." It is about the provider's registration, not your contract. TDLR says "The Texas Provider and Administrator registrations are valid for one year and must be renewed annually."1
Whether a contract can be renewed, or may be declined at the end of its term, is therefore a question for your contract and for a lawyer or your state consumer protection office. Our guide on auto-renewal clauses covers renewing contracts in general, and South Carolina's rule shows one state that regulates renewal notice.
For comparison: when you cancel
TDLR says a contract holder who bought on or after January 1, 2012 may cancel at any time. Before the 31st day the provider must refund the full price, less claims paid, with no cancellation fee. From the 31st day, the refund is prorated and the provider may charge a reasonable fee of up to $50.1 See home warranty cancellation and refund rights for other states.
Where this fits our standard
Points 1 and 2 of our standard look at whether contract terms are clear before purchase and whether cancellation and refund rights are honored. The Register reports how we check providers by category. It describes a method, not a verdict on any company.
How to verify this yourself
- Open the TDLR FAQ (reference 1) and find the question "Can a service contract provider cancel my service contract without my permission or consent?"1
- Read the Texas statute TDLR cites, Occupations Code section 1304.159, and TDLR's rules at 16 Texas Administrative Code chapter 77.1
- For another state, find your state's consumer protection office through the USAGov directory (reference 2).2
What this page is not
This is general information, not legal advice. It covers Texas only and relies on TDLR's FAQ page, which is the regulator's summary and not the statute. It does not say whether any cancellation is valid. USAGov says state consumer protection offices "can help with complaints against businesses, investigating scams and fraud, and more."2
What to do next
If you have a notice, compare it with your contract and the TDLR page above, then contact the provider and TDLR as described. Start from the state regulation hub or the home warranties hub.