AB 231 (BDR 57-655) — Summary
Purpose
- Requires certain service contracts (specifically “home warranty service contracts”) to include and enforce specific duties on the provider, principally setting maximum repair/restore timelines for covered home systems and appliances and a lodging allowance where specified equipment is not restored within the required period.
- Aims to strengthen consumer protections for Nevada homeowners who purchase home warranty contracts.
Key provisions (as of First Reprint, AB231_R1)
- Scope: Applies only to “home warranty service contracts” — defined to cover structural components, appliances or home systems of a residence (electrical, heating, cooling, plumbing, etc.).
- Required contract content: Amends NRS 690C.260 to require the provider’s duties to be specified, and to include the following minimum duties for home warranty contracts:
- General goods (other than AC/furnace/heater): ensure restoration to sound working condition within 14 business days after notice of defect.
- Air conditioner, furnace, or heater: ensure restoration within 5 business days after notice. If the provider fails, it must provide the holder a per diem lodging allowance (rate = comparable Federal GSA per diem under 5 U.S.C. § 5707) until the unit is restored.
- Recurring failure protection: if repaired goods become defective within 14 business days after restoration, the provider must restore them within 2 business days after the holder’s notice.
- Consumer protections already required elsewhere (e.g., NAC provisions for emergency/health-and-safety items) remain in place.
- Definitions: “Restored” means returned to sound working condition by repair or replacement.
- Effective date: The amendments apply to service contracts entered into on or after October 1, 2025.
- Fiscal: The measure reports “No” effect on State or Local Government in the fiscal notes.
Who would be affected
- Consumers (holders of home warranty service contracts): would gain statutory timelines for repairs and a lodging per diem when critical climate-control equipment is not restored timely.
- Service contract providers / home warranty companies: would be required to meet strict repair timelines or provide lodging; potential for increased costs or market withdrawal.
- Repair contractors / technicians: could face pressure from providers to meet tighter service windows; may affect willingness to contract with warranty providers.
- Nevada Division of Insurance: primary regulator; may exercise enforcement authority tied to contract content and misleading contract prohibitions.
Procedural status (selected actions)
- Passed Assembly (as amended) April 22, 2025 (Yeas 27, Nays 15).
- Referred to Senate; placed in committee. As of May 23, 2025: in committee — held under submission.
- As of May 17, 2025: listed as “Pursuant to Joint Standing Rule No. 14.3.3, no further action allowed.”
Stakeholder positions / potential impacts
- Industry (Service Contract Industry Council, National Home Service Contract Association): expressed strong opposition — cite practical limits (technician availability, parts shortages), possible increased costs passed to consumers, and risk that providers exit the Nevada market.
- Nevada Division of Insurance: neutral; notes existing NAC requirements for essential (health/safety) items and that AB 231 would give the Division additional authority; warned some providers may reevaluate participation if market factors impede compliance.
- Consumer advocates / practical effect: would provide clearer timelines and lodging remedy for failure to timely restore critical HVAC/heating equipment; actual enforcement, market responses, and cost impacts uncertain.
Notes
- Earlier conceptual and committee amendments proposed (but not adopted in the reprint) changes such as shortening AC repair time to 3 calendar days, expanding duties, or creating deceptive-practice penalties; the First Reprint (AB231_R1) reflects the version that passed the Assembly.
