2023 Code of Alabama › Title 8 - Commercial Law and Consumer Protection. › Chapter 32 - Service Contracts. › Section 8-32-5 - Required Provisions, Service Contracts.

Section 8-32-5
Required provisions, service contracts.
(a) Service contracts sold or offered for sale in this state, in their entirety, shall be written, printed, or typed in eight point type size, or larger, and shall comply with the requirements set forth in this section, as applicable.
(b) Service contracts insured under a reimbursement insurance policy pursuant to subdivision (1) of subsection (f) of Section 8-32-3 shall contain a statement in substantially the following form:
"Obligations of the provider under this service contract are guaranteed under a service contract reimbursement insurance policy."
If the provider fails to pay or to provide service on a claim within 60 days after proof of loss has been filed, the service contract holder is entitled to make a claim directly against the reimbursement insurance company. The service contract shall state the name and address of the reimbursement insurance company.
(c) Service contracts not insured under a reimbursement insurance policy pursuant to subdivision (1) of subsection (f) of Section 8-32-3 shall contain a statement in substantially the following form:
"Obligations of the provider under this service contract are backed by the full faith and credit of the provider."
(d) Service contracts shall state the name and address of the provider, and shall identify any administrator, the service contract seller, and the service contract holder to the extent that the name and address of the service contract holder has been furnished by the service contract holder. Neither the name of the service contract seller nor other provisions are required to be preprinted on the service contract and may be added to the service contract at the time of sale.
(e) Service contracts shall state the purchase price of the service contract, the term of the service contract and any applicable renewal provisions. Neither the purchase price nor any other provisions are required to be pre-printed on the service contract and may be negotiated at the time of sale with the service contract holder.
(f) If the provider will reimburse the contract holder for repair work performed by third parties and if prior approval of repair work is required, (i) the service contract shall state the procedure for obtaining prior approval and for making a claim, including a toll-free telephone number for claim service and (ii) if the service contract provides services essential to public health, safety, or welfare, the service contract shall either provide for 24-hour telephone assistance, or state the procedure for obtaining emergency repairs performed outside of normal business hours.
(g) Service contracts shall state the existence of any deductible amount.
(h) Service contracts shall describe the property upon which the services are to be provided, the services to be provided and any limitations, exceptions, or exclusions to the services to be provided.
(i) Service contracts shall state whether the use of non-original manufacturer's parts is allowed.
(j) Service contracts shall state any restrictions governing the transferability of the service contract.
(k) Service contracts shall state the terms, restrictions, or conditions governing cancellation of the service contract prior to the termination or expiration date of the service contract by either the provider or by the service contract holder. The provider of the service contract shall mail a written notice to the service contract holder at the last known address of the service contract holder contained in the records of the provider at least five days prior to cancellation by the provider. Prior notice is not required if the reason for cancellation is nonpayment of the provider fee or a material misrepresentation by the service contract holder to the provider relating to the covered property or its use. The notice shall state the effective date of the cancellation and the reason for the cancellation.
(l) Service contracts shall set forth the obligations and duties of the service contract holder relating to the property covered by the service contract.
(m) Service contracts shall state whether or not the service contract provides for or excludes consequential damages or preexisting conditions, to the extent applicable.
(n) Service contracts may contain other provisions as determined by the provider.
(Acts 1997, No. 97-445, p. 753, §5.)