Public Act 098-0222
 
HB1460 EnrolledLRB098 07451 RPM 37519 b

    AN ACT concerning insurance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Service Contract Act is amended by changing
Section 5 as follows:
 
    (215 ILCS 152/5)
    Sec. 5. Definitions.
    "Department" means the Department of Insurance.
    "Director" means the Director of Insurance.
    "Road hazard" means a hazard that is encountered while
driving a motor vehicle, including, but not limited to,
potholes, rocks, wood debris, metal parts, glass, plastic,
curbs, and composite scraps.
    "Service Contract" means a contract or agreement whereby a
service contract provider undertakes for a specified period of
time, for separate and identifiable consideration, to perform
the repair, replacement, or maintenance, or indemnification
for such services, of any automobile, system, or consumer
product in connection with the operational or structural
failure due to a defect in materials or workmanship, or normal
wear and tear, with or without additional provision for
incidental payment or indemnity under limited circumstances,
for related expenses, including, but not limited to, towing,
rental, and emergency road service. Service contracts may
provide for:
        (1) the repair, replacement, or maintenance of such
    property for damage resulting from power surges and
    accidental damage from handling; .
        (2) the repair or replacement of tires or wheels, or
    both, on a motor vehicle damaged as the result of coming
    into contact with road hazards;
        (3) the removal of dents, dings, or creases on a motor
    vehicle that can be repaired using the process of paintless
    dent removal without affecting the existing paint finish
    and without replacing vehicle body panels, sanding,
    bonding, or painting;
        (4) the repair of chips or cracks in or the replacement
    of motor vehicle windshields as a result of damage caused
    by road hazards;
        (5) the replacement of a motor vehicle key or key-fob
    in the event that the key or key-fob becomes inoperable or
    is lost or stolen;
        (6) a protective chemical, substance, device, or
    system that (A) is installed on or applied to a motor
    vehicle, (B) is designed to prevent loss or damage to a
    motor vehicle from a specific cause, and (C) includes a
    written product warranty providing for payment to or on
    behalf of the warranty holder's incidental costs in the
    event that the product fails to prevent loss or damage as
    specified; the reimbursement of incidental costs under the
    warranty must be tied to the purchase of a physical product
    that is formulated or designed to make the specified loss
    or damage less likely to occur; or
        (7) other services that may be approved by the
    Director, if not inconsistent with other provisions of this
    Act.
Service contracts shall not include:
        (i) contracts of limited duration that provide for
    scheduled maintenance only; .
        (ii) fuel additives, oil additives, or other chemical
    products applied to the engine, transmission, or fuel
    system of a motor vehicle;
        (iii) coverage for the repair or replacement, or both,
    of damage to the interior surfaces of a vehicle, or for
    repair or replacement, or both, of damage to the exterior
    paint or finish of a vehicle; however, such coverage may be
    offered in connection with the sale of a protective
    chemical, device, or system described in item (6) of this
    definition.
    "Service contract holder" means the person who purchases a
service contract or a permitted transferee.
    "Service contract provider" means a person who is
contractually obligated to the service contract holder under
the terms of the service contract. A service contract provider
does not include an insurer.
    "Service contract reimbursement insurance policy" means a
policy of insurance that is issued to the service contract
provider to provide reimbursement to the service contract
provider or to pay on behalf of the service contract provider
all covered contractual obligations incurred by the service
contract provider under the terms and conditions of the insured
service contracts issued or sold by the service contract
provider.
    "System" means the heating, cooling, plumbing, electrical,
ventilation, or any other similar system of a home.
(Source: P.A. 90-711, eff. 8-7-98.)

Effective Date: 1/1/2014