HB154 Alabama 2024 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Artis McCampbellRepresentative
Democrat
Session: Regular Session 2024
Title: Service contract providers, disclosures required in contracts and related marketing, limitation of liability, right to pay out cash value in lieu of repair or replacement, size and placement of disclosures.
Summary: HB154 would require service contract providers to clearly define terms, disclose limits of liability and cash-value payout rights, and place these disclosures prominently in contracts and marketing.
What This Bill Does
If enacted, the bill would force service contract providers to define key terms like repair, replace, and cash value in their contracts; require bold, clearly visible disclosures on the first page about how much the provider may pay and when, including the option to pay cash value instead of repairing or replacing property; and mandate similar disclosures in all marketing and advertising. It also sets specific font size and placement rules for these disclosures. The bill includes insurance-related language, requiring either a reimbursement-insurance guarantee statement or a statement that obligations are backed by the provider’s full faith and credit, and it gives the contract holder a path to claim directly against the insurer if the provider does not pay within 60 days. It becomes effective October 1, 2024.

Who It Affects
Service contract providers (issuers and marketers) must update contracts and advertising to meet the new definitions, disclosure requirements, font size, and placement rules.
Contract holders / consumers will receive clearer information about coverage limits, the right to receive cash value in lieu of repair or replacement, and the terms for cancellation and claims.
Administrators, sellers, and the records custodians referenced in the contract must be identified on the contract, with some information potentially added at the time of sale.
Reimbursement insurance providers may be named in contracts; if used, consumers have the option to file claims directly with the insurer after 60 days if the provider hasn’t paid.
Providers not backed by reimbursement insurance must state that obligations are backed by the provider’s full faith and credit.

Key Provisions
Define terms used in contracts, including repair, replace, and cash value.
Contracts must be written in eight-point type size or larger.
On the first page, bold disclosures (in large print) of any liability limits and the circumstances under which they apply, plus the provider’s right to satisfy claims with cash value.
Marketing and advertising content must disclose the cash-value payment right in the same size as other benefits.
If insured under a reimbursement policy, include a statement that obligations are guaranteed under that policy; provide that the holder may sue the insurer if the provider fails to pay within 60 days after proof of loss, and include the insurer’s name and address.
If not insured, include a statement that obligations are backed by the provider’s full faith and credit.
Contract must state provider name and address, identify administrator, seller, and holder when provided; some information may be added at the time of sale.
Contract must state purchase price, term, and renewal provisions; these may be negotiated at sale and do not have to be preprinted.
If the provider will reimburse for third-party repairs and prior approval is needed, outline the approval and claim process, including a toll-free number for claims and emergency repair procedures.
Disclose existence of any deductible; describe the property, services, and any limitations, exclusions, or exceptions.
State whether non-original manufacturer parts are allowed; specify transferability restrictions; outline cancellation terms and provide five days’ notice before cancellation by the provider (with limited exceptions).
Outline obligations and duties of the contract holder regarding the covered property; indicate whether the contract covers or excludes consequential damages or preexisting conditions; providers may include other provisions.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Consumer Protection