Last reviewed: 21 October 2026
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United StatesHow home warranties work in the US, and who regulates them
A home warranty is a contract to repair or replace parts of a home's systems or appliances. The FTC calls it a service contract, not a product warranty. In the three states below, three different state agencies license or register the companies. This guide reports what those agencies and statutes say.
The short answer
- What it is: the FTC says home warranties "are really service contracts" and that, unlike builder warranties or warranties included with some products, "they cost extra."2
- Who regulates them: it depends on the state. In California, the Department of Insurance licenses home warranty companies, even though "a home warranty is not an insurance policy."3 In Florida, the Office of Insurance Regulation licenses "home warranty associations."6 In Texas, the Texas Department of Licensing and Regulation (TDLR) oversees them under the Service Contract Regulatory Act.78
- What to check first: whether the company holds the license or registration your state requires, then the contract's exclusions, dollar limits and service fees.13
Who regulates home warranty companies?
The FTC's consumer guidance separates a warranty that comes with a product from an "extended warranty or service contract," which "costs extra and might cover different issues than a manufacturer's warranty."1 The FTC describes home warranties as service contracts.2 Beyond that, the rules are set state by state. Three examples show how far apart the models are:
| State | What the law calls it | Who licenses or registers the company | Where the rules are |
|---|---|---|---|
| California | "Home protection contract" / "home protection company"3 | California Department of Insurance3 | Insurance Code §§ 12740–12764 (the "Home Protection Law") and 10 CCR § 2570 et seq.4 |
| Florida | "Home warranty" / "home warranty association"5 | Florida Office of Insurance Regulation6 | Florida Statutes chapter 634, Part II5 |
| Texas | "Residential service contract"7 | Texas Department of Licensing and Regulation78 | Occupations Code chapter 1304 (Service Contract Regulatory Act)7 |
California. The Department of Insurance (CDI) says that "a home warranty is not an insurance policy. However, for the protection of consumers, home warranty companies are regulated and licensed by the California Department of Insurance."3 CDI's page for companies says Insurance Code sections 12740–12764 "address, among other things, definitions and licensing for Home Protection companies," and that home protection contracts and companies are not governed by the rest of the Insurance Code "except for the sections enumerated in CIC section 12743."4 See our California guide.
Florida. Florida's statute defines a "home warranty association" as an organization, "other than an authorized insurer, issuing home warranties."5 It says no one in Florida "shall provide or offer to provide home warranties unless authorized therefor under a subsisting license issued by the office," and that doing so without a license is "a misdemeanor of the first degree."6 An insurer authorized for property or casualty insurance in Florida may also transact home warranty business "without additional qualifications or authority."6 See our Florida guide.
Texas. TDLR says oversight of residential service companies (home warranties) "was transferred to TDLR from the Texas Real Estate Commission (TREC) on September 1, 2021," under House Bill 1560.89 Chapter 1304 now defines a "residential service contract" as a service contract covering failure of, or normal wear to, a structural component, an appliance, or an electrical, plumbing, heating, cooling or air-conditioning system of a home.7 The chapter says service contracts are exempt from "the Insurance Code and other laws of this state regulating the business of insurance," and a provider must be registered with TDLR.7 See our Texas guide.
Other states. These three are examples, not a pattern every state follows. Every state guide we have published is listed under US home warranty guides. If your state is not there, your state consumer protection office (USAGov directory) is a place to start; the FTC suggests checking with it for complaints against a company.1
What state law can require a contract to say
Two examples from the sources above:
- California: CDI says the law requires a home warranty to state, "in clear and conspicuous terms," each covered appliance, system and component; "all exclusions and limitations"; the contract period, fee and renewal terms; the services and any service fees; and limits on when or where service may be requested. It must also represent that service will be initiated "within 48 hours after a request is made."3
- Texas: a service contract must state the amount of any deductible, specify "any limitation, exception, or exclusion," and "state whether the contract provides for or excludes consequential damages or preexisting conditions, if applicable."7 A residential service contract must state that, "under normal circumstances," the provider will begin service "not later than 48 hours after the contract holder requests the services."7 Texas also lets the holder cancel "at any time," with a full refund (less claims paid) before the 31st day and a prorated refund after that, less claims paid and a cancellation fee of no more than $50.7
How coverage works
CDI describes a home warranty as a contract in which the company "promises to repair or replace parts of a home system or certain appliances," and says that "in some cases, or for additional fees," a warranty might also cover items such as air conditioning units, garbage disposals, ceiling fans or water softeners.3 CDI also says "home warranty forms are not standardized," so the covered items "will be stated in the contract."3
On cost, the FTC tells buyers to consider "both the upfront cost and costs that may be hidden, like deductibles or fees you need to pay each time products are serviced," and to ask whether there are "limits on the amounts you can be reimbursed."2 Contracts set their own fees, waiting periods and caps, so read those numbers in the contract itself.
Exclusions and denied claims
CDI says "all home warranties contain dozens of exclusions," and that many buyers "only discover the exclusions, conditions, and limitations that exist in every home warranty when they file a claim and have it denied."3 It lists "unfair claim denials and unreasonably delayed repairs" among the things consumers sometimes complain about.3 The FTC asks whether the company "can deny coverage if, for example, you don't follow their instructions for routine maintenance," and advises: "If it isn't listed in the contract, assume that it's not covered."1 Our guide on pre-existing conditions covers that exclusion in detail.
Questions people ask
Is a home warranty regulated as insurance?
It depends on the state. California licenses home warranty companies through its insurance department but says a home warranty "is not an insurance policy."3 Texas exempts service contracts from the Insurance Code and registers providers with TDLR.7
How do I check that a home warranty company is licensed?
Ask the agency for your state. In California, CDI says to "check the license status of a home warranty company prior to purchasing a contract," by phone at 1-800-927-4357 or through its list of licensed home protection companies.3 TDLR tells Texas consumers to "check to see if the Residential Service Company they are considering is licensed by TDLR."9 See also how to verify a home warranty company.
Where do I complain about a home warranty company?
The FTC says to report problems with a service contract to the FTC at ReportFraud.ftc.gov and to your state attorney general.1 In California, CDI says that if a home protection company denies your appeal, "you may seek assistance from the Department."3 Our guide on where to file a warranty complaint lists other routes.