Last reviewed: 3 October 2026

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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.

Correction (3 October 2026): this page previously cited s. 634.406 (service warranty associations, Part III of Chapter 634) for home warranty association financial requirements, and described a further 10 percent reserve-deposit filing that applies under that section. It now cites s. 634.3077 (Part II, Home Warranty Associations), which is the section that governs home warranty associations, and the 10 percent reserve-deposit claim has been removed. The page also previously presented a $750,000 net-worth floor and a $100 million parent-corporation net worth as a general requirement; under s. 634.3077 those figures apply to the alternative for an association that relies on net worth in place of a reserve or insurance, and the page now says so. The cancellation, pre-sale disclosure and licensing statements were re-checked against the statute text and are unchanged.

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 financial oversight sit with the Florida Office of Insurance Regulation (OIR), which the Insurance Code defines as the "office" (§ 624.05) and which issues the license under § 634.303. The Department of Financial Services' Division of Consumer Services separately publishes a consumer overview of home warranties that tells shoppers to verify the company is licensed in Florida.

The financial backbone: a funded reserve, with insurance and net-worth alternatives

Florida Statutes § 634.3077, in Part II, sets the financial requirements for a licensed home warranty association. The core rule is a funded reserve: the association must maintain a funded, unearned premium reserve account, made up of unencumbered assets, equal to at least 25 percent of the gross written premiums it has received from all warranty contracts in force in Florida, held as a separate auditable account. It must also keep net assets of at least one-sixth of the written premiums on warranties in force — though net assets may be lower if the association has at least $500,000 in net assets and keeps a larger reserve of at least 40 percent. The statute then offers two alternatives, the same "funded reserve or insurance" logic our standard checks generally, made specific here. First, an association is not required to set up the reserve if it has purchased contractual liability insurance that shows, to the Office of Insurance Regulation's satisfaction, that 100 percent of its claim exposure is covered. Second, an association need not set up a reserve or carry that insurance if it, or its parent corporation, maintains a net worth of at least $100 million (with audited financial statements and quarterly certification to the office); where the parent's net worth is relied on, the parent must guarantee the association's warranty obligations and the association itself must keep net assets of at least $750,000 at all times.

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.