Last reviewed: 15 September 2026

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Michigan excluded service contracts from its insurance code by name in 2014

Like our Pennsylvania page covers, Michigan is another state whose insurance code excludes a service contract from regulation directly, rather than routing it through a licensing chapter. Michigan's version is newer — added in 2014 — and it isn't quite the only product-specific rule on the books: a much older, much narrower Consumer Protection Act provision from 1979 survives alongside it.

MCL 500.125: added in 2014, one sentence of substance

Section 125 of Michigan's Insurance Code of 1956, added by 2014 PA 110 (effective April 10, 2014), states plainly: "A service contract is not insurance or the business of insurance and is not subject to this act." The section defines "service contract" in the same broad, two-product way Pennsylvania's exemption does — a written contract, sold for separately stated consideration, for a specific duration, providing repair, replacement, or maintenance of a "consumer product" (tangible personal property, including property intended for attachment to or installation in real property) due to operational or structural failure, damage, or normal wear and tear, and expressly extending the same treatment to a motor vehicle service contract, including towing and emergency road service. One 2014 amendment, one exemption, both a home warranty and a vehicle service contract covered.

The one specific rule that predates the exemption by 35 years

Section 3a of the Michigan Consumer Protection Act (MCL 445.903a), added by 1979 PA 150, requires a home appliance service contract to contain a specific clause: if performance of the contract is interrupted by a strike or work stoppage at the company's place of business, the contract's effective period must be extended for the length of that interruption. It's a narrow, single-purpose content mandate — not a licensing or financial-backing requirement of any kind — and it has sat on the books, apparently untouched, since a year when a labor stoppage at a service company was evidently common enough a concern to legislate around it directly. It's also the closest thing Michigan law has to a home-warranty-specific consumer protection, since the 2014 insurance exemption itself imposes no content or disclosure requirements at all.

No license, no bond, no reserve requirement

As in Pennsylvania, the practical result is that Michigan imposes none of the mechanisms point 3 and point 4 of our standard check for elsewhere: no Department of Insurance and Financial Services (DIFS) license, no separate service-contract-provider registration, and no state-mandated reserve, reimbursement-insurance policy, or surety bond sized to a provider's outstanding obligations. A shopper can't verify a Michigan service contract seller's claims-paying mechanism against a state requirement, because Michigan's statute doesn't require one to exist.

What actually protects a Michigan buyer

The general-purpose backstop is the Michigan Consumer Protection Act itself (MCL 445.901 et seq.), which prohibits unfair, unconscionable, or deceptive methods, acts, or practices in trade or commerce and is enforced by the Michigan Attorney General. It also gives a consumer a private right of action under MCL 445.911(2): a person who suffers loss can recover actual damages or $250, whichever is greater, plus reasonable attorney's fees, with the court able to award up to three times actual damages for willful conduct. That 1979 strike-extension clause aside, this general MCPA remedy — not a service-contract-specific state license or bond — is what a Michigan buyer is actually relying on.