Last reviewed: 14 September 2026

Home › The Library › Florida home warranty regulation

How Florida regulates home warranty associations

Florida is one of the states that decided a home warranty company should be regulated like an insurer, not like an unregulated service business. The result is a specific, checkable set of financial requirements and a statutory cancellation right — not just a general consumer-protection promise.

Licensed as a "home warranty association," inside the insurance code

Florida Statutes Chapter 634, Part II (sections 634.301 through 634.348), sitting inside Title XXXVII (Insurance), requires a "home warranty association" to hold a license before selling a home warranty in the state. Licensing and solvency oversight sit with the Florida Office of Insurance Regulation (OIR); day-to-day consumer complaints about an insurance-adjacent product like this are generally handled through the state's companion agency, the Department of Financial Services' Division of Consumer Services — Florida splits insurance regulation across the two agencies rather than housing it all in one place, which is worth knowing before assuming a single "Florida insurance department" handles everything.

The financial backbone: a net-worth floor, and a reserve or insurance requirement

Florida Statutes § 634.406 sets a specific net-worth floor: a licensed home warranty association must maintain at least $750,000 in net assets at all times, and if the association is a subsidiary, its parent corporation must separately maintain a net worth of at least $100 million. Beyond that floor, an association must back its outstanding contract obligations one of two ways — the same "funded reserve or insurance" logic our standard checks generally, made specific here: either a funded, unearned-premium reserve account, held in unencumbered assets equal to at least 25 percent of gross written premium on contracts currently in force, with a further reserve deposit filed with the state equal to 10 percent of that same gross written premium; or contractual liability insurance covering 100 percent of the association's claim exposure. An association can't use both mechanisms at once — it has to pick one and actually meet it.

A cancellation right written directly into the statute

Florida Statutes § 634.312 gives a purchaser an unconditional right to cancel a home warranty agreement within 10 days of purchase, with a refund of 100 percent of the gross premium paid, less any claims already paid, and an administrative fee capped at 5 percent of the premium. After that 10-day window, a homeowner-initiated cancellation still gets a refund — 90 percent of the unearned pro-rata premium, less claims paid — and if the association itself cancels the contract for a reason other than the purchaser's fraud or misrepresentation, the refund rises to 100 percent of unearned pro-rata premium, less claims paid. That's a meaningfully more specific right than a generic "check your state's consumer protection law" answer, and it's checkable against the statute directly rather than a provider's own marketing claim.

Pre-sale disclosure is also a statutory requirement, not just good practice

Florida Statutes § 634.336, Florida's home-warranty-specific unfair-trade-practices provision, requires that a complete sample copy of a home warranty contract's terms and conditions be made available to a consumer before the sale, on request — precisely the point-1 check on our standard, with its own specific statutory citation in Florida rather than a general disclosure principle.