Insurance Code section 12740

The definitions used in this section govern the construction and terms used in this part but shall not affect any other provisions of this code:

(a)

“Home protection contract” means a contract or agreement whereby a person, other than a builder, seller, or lessor of the home which is the subject of the contract, undertakes for a specified period of time, for a predetermined fee, to repair or replace all or any part of any component, system or appliance of a home necessitated by wear and tear, deterioration or inherent defect, arising during the effective period of the contract, and, in the event of an inspection conducted pursuant to subdivision (b) of Section 12761, by the failure of that inspection to detect the likelihood of any such loss.
Such contract shall provide for a system of service for effectuating such repair or replacement and shall not include protection against consequential damage from the failure of any component, system or appliance.

(b)

“Home protection company” means any person licensed pursuant to this part which issues home protection contracts.

(c)

“Protection contract fee” means the consideration received, or to be received, by a home protection company for the issuance of any home protection contract.
A home protection contract fee shall be the fee established by a home protection company for coverage extending one year from the effective date of the contract. Where initial coverage is provided for a period in excess of one year, the home protection contract fee shall be the annual fee, plus a separately stated pro rata portion of the annual fee for the period of coverage which exceeds one year.

(d)

“Home” or “residential property” as used in this part means any single or multiple unit or units, including mobilehomes, (as defined in Health and Safety Code Section 18211) used primarily for residential purposes.

Source: Section 12740, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=INS§ionNum=12740.­ (accessed Apr. 24, 2025).

Last Updated

Apr. 24, 2025

§ 12740’s source at ca​.gov