Pennsylvania Statutes Title 40 P.S. Insurance § 477f. Service contract exclusion

(a) The marketing, sale, offering for sale, issuance, making, proposing to make and administration of a service contract shall not be construed to be the business of insurance and shall be exempt from regulation as insurance.

(b) “Service contract” means a contract or an agreement for a separately stated consideration for a specific duration to perform the service, repair, replacement or maintenance of property or indemnification for service, repair, replacement or maintenance, for the operational or structural failure due to a defect in materials, workmanship or normal wear and tear with or without additional provisions for incidental payment of indemnity under limited circumstances, including, but not limited to, towing, rental and emergency road service. Service contracts may provide for the service, repair, replacement or maintenance of property for damage resulting from power surges or accidental damage from handling, provided, however, that an insurance company providing coverage or payment for towing, rental, emergency road service or mechanical breakdown insurance shall not be considered to be providing a service contract; and further provided that automobile club coverage or payment of towing, rental or emergency road service shall not be considered a service contract and shall not be regulated as insurance.