Kansas and Delaware define a service contract and exempt it from insurance law; the sections contain no registry, funding rule, disclosure list or refund rule

Some states build a registry, a funding rule and a list of required disclosures around service contracts. The Kansas (K.S.A. 40-201a) and Delaware (18 Del. C. §§ 917 and 918) provisions each define a service contract and say it is not regulated as insurance. This page sets out exactly what those sections say and which familiar requirements they do not contain.

The short answer

Kansas: the marketing, sale, issuance and administration of a service contract "shall not be construed to be the business of insurance and shall be exempt from regulation as insurance" under Chapter 40.¹
Delaware: offering, selling or issuing a service contract (and a GAP waiver, vehicle theft protection product warranty or maintenance agreement) "shall not be considered insurance or subject to the insurance laws of this State unless made expressly applicable thereto."²
Kansas adds two content limits: a service contract may not contain a consequential-damages provision unless the damages are caused by failure of the service rendered, and may not contain a provision that would otherwise be covered by a property or liability insurance contract.¹
What is not in these sections: neither Kansas K.S.A. 40-201a nor Delaware §§ 917 and 918 contains a provider registration or licensing rule, a financial-backing rule, a list of required contract disclosures, or a cancellation-refund rule.¹ ²

Kansas: K.S.A. 40-201a

The section is titled "Service contract; definitions; exemption from regulation." It defines a service contract as a contract or agreement for a separate or additional consideration, for a specified duration, to service, repair, replace or maintain all or any part of any structural component, appliance or utility system of residential property, a consumer good or other property, or to indemnify for that service, due to a defect in materials or workmanship or normal wear and tear, or as a result of power surges or accidental damage from handling, where service, repair or replacement is not reasonably, commercially or economically feasible.¹ The term also includes nonconsumer commercial service contracts, and contracts offering tire and wheel road-hazard repair, paintless dent removal or key and key-fob replacement. It does not include an automobile club service contract.¹

Subsection (c) limits what such a contract may contain: no consequential-damages provision unless caused by failure of the service, repair, replacement or maintenance rendered under the contract, and no provision, except as the section exempts, that would otherwise be covered by a contract of property or liability insurance issued in Kansas.¹ The section's history notes enactment in 2005 and amendments through 2021.¹

Delaware: 18 Del. C. §§ 917 and 918

The two sections sit in Title 18 (the Insurance Code), Chapter 9, Subchapter IV (Exemptions). Section 917 supplies definitions. A "consumer product" is tangible personal property distributed in commerce and normally used for personal, family or household purposes, including a motor vehicle and property intended to be attached to or installed in real property, whether or not it is attached.² A "service contract" is a contract or agreement for a separately stated consideration for any duration to perform the repair, replacement or maintenance of a consumer product, or indemnify for it, for operational or structural failure due to a defect in materials or workmanship, accidental damage from handling, or normal wear and tear. It may include incidental payments such as towing, rental and emergency road service, and covers damage from power surges or interruption.² The definition also includes certain vehicle items (such as additive-product performance, tire and wheel road-hazard repair, dent removal, windshield repair, key replacement), contracts reducing amounts due on a finance agreement after a total loss or unrecovered theft, and other services or products approved by the Commissioner.²

Section 918 is the exemption. It says the offering, sale or issuance of a guaranteed asset protection waiver, service contract, vehicle theft protection product warranty or maintenance agreement is not considered insurance or subject to the insurance laws of Delaware unless made expressly applicable.²

Side by side

What each section contains
Question	Kansas K.S.A. 40-201a	Delaware 18 Del. C. §§ 917-918
Defines a service contract?	Yes.¹	Yes.²
Exempts it from insurance regulation?	Yes.¹	Yes, unless made expressly applicable.²
Limits what a contract may contain?	Yes, two limits.¹	No such limit in these sections.²
Provider registration or licensing?	Not in this section.¹	Not in these sections.²
Financial backing (reserve, bond, insurance)?	Not in this section.¹	Not in these sections.²
Required contract disclosures?	Not in this section.¹	Not in these sections.²
Cancellation or refund rule?	Not in this section.¹	Not in these sections.²

This table describes only the sections named. We did not survey other Kansas or Delaware laws, such as general consumer-protection statutes, that may also apply to a service contract sale.

What this means for a reader

These sections do not set up a registry or a funding rule, so they do not point to a state record of that kind. We did not survey other Kansas or Delaware law, which may. Our guide on reading a warranty contract and on state consumer protection acts cover what to look at. The federal Magnuson-Moss Warranty Act applies to written warranties on consumer products regardless of state; see our explainer, which also explains why a service contract is not a warranty in federal law.

Where this fits in our standard

Our standard asks in point 3 about state licensing or registration and in point 4 about a funded-claims mechanism where the state requires one. The standard also says an inapplicable point is marked N/A with a stated reason rather than silently skipped. These statutes are an example of why. The Register describes how we apply the points. This page describes statutes, not any provider.

How to verify this yourself

Read K.S.A. 40-201a on the Kansas Office of the Revisor of Statutes site (reference 1), which also shows the section's history line.
Read 18 Del. C. Chapter 9, Subchapter IV on the Delaware Code Online site (reference 2). It lists sections 917 and 918.
Search both states' codes for other provisions that could apply to your contract. This page does not.
To find your state's consumer protection office, use the USAGov directory.

What this page is not

This is general information about the text of two short statutes, not legal advice. It does not say that Kansas or Delaware has no other rules affecting service contracts, and it does not apply any law to your facts. Statutes change; confirm the current text before relying on it.

What to do next

Read your contract's coverage, exclusions and cancellation terms with our contract comparison guide, or return to the state regulation hub.