EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
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*hb1046*
HOUSE BILL 1046
I3, R4 (5lr3167)
ENROLLED BILL
— Economic Matters/Finance —
Introduced by Delegate Bagnall
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
AN ACT concerning 1
Insurance Protections for Vehicle Service Contracts 2
Mechanical Repair Contracts – Technical Service Bulletins 3
FOR the purpose of establishing that a licensed vehicle dealer, an obligor, or an agent that 4
sells mechanical repair contracts for motor vehicles may not make deceptive or 5
misleading statements regarding the mechanical repair contract and shall ensure 6
that testimonials of any of their endorsers are truthful, accurate, and not deceptive 7
prohibiting a mechanical repair contract from containing a provision precluding 8
coverage for service to a motor vehicle for issues identified in a technical service 9
bulletin and prohibiting the denial of a service claim for such an issue by certain 10
persons; and generally relating to technical service bulletins and mechanical repair 11
contracts for motor vehicles. 12
BY repealing and reenacting, without amendments, 13
Article – Commercial Law 14 2 HOUSE BILL 1046
Section 14–404 1
Annotated Code of Maryland 2
(2013 Replacement Volume and 2024 Supplement) 3
BY repealing and reenacting, without amendments, 4
Article – Transportation 5
Section 15–311.2(a) and (e) through (h) 6
Annotated Code of Maryland 7
(2020 Replacement Volume and 2024 Supplement) 8
BY repealing and reenacting, with amendments, 9
Article – Transportation 10
Section 15–311.2(i) 11
Annotated Code of Maryland 12
(2020 Replacement Volume and 2024 Supplement) 13
BY adding to 14
Article – Commercial Law 15
Section 14–404.1 16
Annotated Code of Maryland 17
(2013 Replacement Volume and 2024 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – Commercial Law 21
14–404. 22
(a) (1) A guarantor shall fulfill the guarantor’s guaranty according to its 23
terms: 24
(i) Within a reasonable time; and 25
(ii) For the stated period of the guaranty or, if no period is stated, for 26
a reasonable period of time. 27
(2) A provider shall fulfill the obligations under the service contract 28
according to its terms: 29
(i) At or within the period stated in the service contract, or if no 30
period is stated, within a reasonable time; and 31
(ii) For the stated duration of the service contract. 32
(b) (1) (i) A guaranty is extended automatically when a guarantor fails to 33
repair successfully a malfunctioning or defective product within the guaranty period. 34 HOUSE BILL 1046 3
(ii) The guaranty does not terminate until the consumer product 1
successfully performs its intended function for the remaining period of the guaranty plus a 2
period equal to the time of repair. 3
(2) (i) A service contract is extended automatically when the provider 4
fails to perform the services under the service contract. 5
(ii) The service contract does not terminate until the services are 6
provided in accordance with the terms of the service contract. 7
(c) If a guaranty fails to disclose the information required by § 14–403 of this 8
subtitle, the guarantor shall, without charge and within a reasonable period of time: 9
(1) Repair a malfunctioning or defective consumer product; or 10
(2) If repair is not commercially practicable or cannot be timely made, 11
replace the malfunctioning or defective consumer product. 12
(d) (1) If a guarantor is unable to fulfill the terms of the guaranty within 10 13
days of the tender or delivery of a consumer product to the guarantor, the guarantor shall 14
provide on request of the person guaranteed a brief written explanation of the reasons for 15
the delay. 16
(2) If a provider is unable to fulfill the terms of the service contract within 17
10 days after the date on which the provider is required to perform obligations under the 18
service contract, the provider shall provide on request of the person guaranteed a brief 19
written explanation of the reasons for the delay. 20
Article – Transportation 21
15–311.2. 22
(a) (1) In this section the following words have the meanings indicated. 23
(2) “Agent” means a business entity that is authorized by an obligor or a 24
licensed vehicle dealer to sell a mechanical repair contract. 25
(3) (i) “Mechanical repair contract” means any agreement or contract 26
sold by a licensed vehicle dealer, an obligor, or an agent under which the obligor agrees to 27
perform over a fixed period of time, for a specific duration, and for a specific identifiable 28
price, provided that the purchase of the contract is optional to the purchaser, any of the 29
following services: 30
1. The repair, replacement, or maintenance of a motor 31
vehicle, or the indemnification for the repair, replacement, or maintenance of a motor 32
vehicle, for the operational or structural failure of the motor vehicle due to a defect in 33 4 HOUSE BILL 1046
materials, workmanship, or normal wear and tear, with or without additional provisions 1
for incidental payment of indemnity for services including towing, rental and emergency 2
road service, and road hazard protection; 3
2. The repair, replacement, or maintenance of a motor 4
vehicle for the operational or structural failure of one or more parts or systems of the motor 5
vehicle brought about by the failure of an additive product to perform as represented; 6
3. The repair or replacement of tires or wheels on a motor 7
vehicle damaged as a result of coming into contact with road hazards, including potholes, 8
rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps; 9
4. The removal and repair of dents, dings, or creases on a 10
motor vehicle using the process of paintless dent removal; 11
5. The repair of chips or cracks in, or the replacement of, 12
motor vehicle windshields as a result of damage caused by road hazards; 13
6. The replacement of a motor vehicle key or key fob if the 14
key or key fob becomes inoperable or is lost or stolen; or 15
7. Other services or products that may be approved by the 16
Insurance Commissioner if consistent with the provisions of this section. 17
(ii) “Mechanical repair contract” includes extended warranties and 18
extended service contracts. 19
(iii) “Mechanical repair contract” does not include: 20
1. Warranties under the Magnuson–Moss Warranty Act, 15 21
U.S.C. § 2301, et seq.; 22
2. Contracts or agreements for regular maintenance only; or 23
3. An agreement between a motor club, as defined in § 24
26–101 of the Insurance Article, and a member or subscriber of the motor club. 25
(4) (i) “Obligor” means the person specified in a mechanical repair 26
contract that is contractually obligated to perform the services set forth in the mechanical 27
repair contract. 28
(ii) “Obligor” does not include an insurer that provides insurance 29
coverage in accordance with subsection (b) of this section. 30
(e) A mechanical repair contract shall be offered in addition to any express 31
warranty originally included as part of the contract for sale of a new motor vehicle. 32
HOUSE BILL 1046 5
(f) A mechanical repair contract shall clearly and conspicuously set forth the date 1
when the warranty begins. 2
(g) A mechanical repair contract shall clearly and conspicuously set forth the date 3
or the odometer reading at which the warranty expires and the name and address of the 4
insurer issuing the policy of insurance as described in subsection (b) of this section. 5
(h) The repair of a malfunction or defect covered under a mechanical repair 6
contract shall include the cost of the teardown and diagnosing the malfunction or defect. 7
(i) (1) The provisions of the Maryland Consumer Products Guaranty Act, Title 8
14, Subtitle 4 of the Commercial Law Article, apply to a mechanical repair contract sold in 9
the State. 10
(2) IN ADDITION TO THE RE QUIREMENTS FOR LICEN SED VEHICLE 11
DEALERS, OBLIGORS, AND AGENTS ESTABLISH ED UNDER § 14–404 OF THE 12
COMMERCIAL LAW ARTICLE, A LICENSED VEHICLE D EALER, AN OBLIGOR, OR AN 13
AGENT: 14
(I) MAY NOT MAKE DECEPTIV E OR MISLEADING STAT EMENTS 15
REGARDING A MECHANIC AL REPAIR CONTRACT ; AND 16
(II) SHALL ENSURE THAT TES TIMONIALS OF ANY OF THEIR 17
ENDORSERS ARE TRUTHF UL, ACCURATE, AND NOT DECEPTIVE . 18
14–404.1. 19
(A) A MECHANICAL REPAIR CO NTRACT UNDER § 15–311.2 OF THE 20
TRANSPORTATION ARTICLE MAY NOT CONTA IN A PROVISION PRECL UDING 21
COVERAGE SOLELY FOR AN ISSUE WITH A MOTOR VEHICLE IDENTI FIED IN A 22
TECHNICAL SERVICE BU LLETIN. 23
(B) A GUARANTOR OR PROVIDE R MAY NOT DENY A MEC HANICAL REPAIR 24
CONTRACT CLAIM SOLELY BECAUSE THE DIAGNOSE D ISSUE WITH THE MOT OR 25
VEHICLE FOR WHICH TH E CLAIM WAS MADE WAS IDENTIFIED IN A TECH NICAL 26
SERVICE BULLETIN . 27
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 28
October 1, 2025. 29