HB1460 EngrossedLRB098 07451 RPM 37519 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Service Contract Act is amended by changing
5Section 5 as follows:
 
6    (215 ILCS 152/5)
7    Sec. 5. Definitions.
8    "Department" means the Department of Insurance.
9    "Director" means the Director of Insurance.
10    "Road hazard" means a hazard that is encountered while
11driving a motor vehicle, including, but not limited to,
12potholes, rocks, wood debris, metal parts, glass, plastic,
13curbs, and composite scraps.
14    "Service Contract" means a contract or agreement whereby a
15service contract provider undertakes for a specified period of
16time, for separate and identifiable consideration, to perform
17the repair, replacement, or maintenance, or indemnification
18for such services, of any automobile, system, or consumer
19product in connection with the operational or structural
20failure due to a defect in materials or workmanship, or normal
21wear and tear, with or without additional provision for
22incidental payment or indemnity under limited circumstances,
23for related expenses, including, but not limited to, towing,

 

 

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1rental, and emergency road service. Service contracts may
2provide for:
3        (1) the repair, replacement, or maintenance of such
4    property for damage resulting from power surges and
5    accidental damage from handling; .
6        (2) the repair or replacement of tires or wheels, or
7    both, on a motor vehicle damaged as the result of coming
8    into contact with road hazards;
9        (3) the removal of dents, dings, or creases on a motor
10    vehicle that can be repaired using the process of paintless
11    dent removal without affecting the existing paint finish
12    and without replacing vehicle body panels, sanding,
13    bonding, or painting;
14        (4) the repair of chips or cracks in or the replacement
15    of motor vehicle windshields as a result of damage caused
16    by road hazards;
17        (5) the replacement of a motor vehicle key or key-fob
18    in the event that the key or key-fob becomes inoperable or
19    is lost or stolen;
20        (6) a protective chemical, substance, device, or
21    system that (A) is installed on or applied to a motor
22    vehicle, (B) is designed to prevent loss or damage to a
23    motor vehicle from a specific cause, and (C) includes a
24    written product warranty providing for payment to or on
25    behalf of the warranty holder's incidental costs in the
26    event that the product fails to prevent loss or damage as

 

 

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1    specified; the reimbursement of incidental costs under the
2    warranty must be tied to the purchase of a physical product
3    that is formulated or designed to make the specified loss
4    or damage less likely to occur; or
5        (7) other services that may be approved by the
6    Director, if not inconsistent with other provisions of this
7    Act.
8Service contracts shall not include:
9        (i) contracts of limited duration that provide for
10    scheduled maintenance only; .
11        (ii) fuel additives, oil additives, or other chemical
12    products applied to the engine, transmission, or fuel
13    system of a motor vehicle;
14        (iii) coverage for the repair or replacement, or both,
15    of damage to the interior surfaces of a vehicle, or for
16    repair or replacement, or both, of damage to the exterior
17    paint or finish of a vehicle; however, such coverage may be
18    offered in connection with the sale of a protective
19    chemical, device, or system described in item (6) of this
20    definition.
21    "Service contract holder" means the person who purchases a
22service contract or a permitted transferee.
23    "Service contract provider" means a person who is
24contractually obligated to the service contract holder under
25the terms of the service contract. A service contract provider
26does not include an insurer.

 

 

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1    "Service contract reimbursement insurance policy" means a
2policy of insurance that is issued to the service contract
3provider to provide reimbursement to the service contract
4provider or to pay on behalf of the service contract provider
5all covered contractual obligations incurred by the service
6contract provider under the terms and conditions of the insured
7service contracts issued or sold by the service contract
8provider.
9    "System" means the heating, cooling, plumbing, electrical,
10ventilation, or any other similar system of a home.
11(Source: P.A. 90-711, eff. 8-7-98.)