On September 8th, 2021

CDI Issues Cease and Desist Orders to Four Home Warranty Companies Companies allegedly selling home warranties without a license

LOS ANGELES — On September 7, 2021, the California Department of Insurance (CDI) announced that it has issued Cease and Desist Orders, effective immediately, to four companies that allegedly sell home warranty contracts in California without proper authorization. Under the Orders, the companies must immediately stop selling the contracts. To protect consumers from fraud, any company marketing and selling home warranty contracts to California consumers must be licensed by the Department of Insurance.

“CDI investigators work to protect consumers by enforcing regulations and investigating possible violations in this state,” said CSLEA President Alan Barcelona.  “It’s a safety net many Californians aren’t aware of, but a very valuable contribution.”

“California consumers place their trust in home warranty companies to provide coverage when something breaks,” said Insurance Commissioner Ricardo Lara. “Our licensing process is intended to protect consumers and ensure ethical standards and practices. Our team works diligently to help companies understand and meet these standards, and when they do not we take decisive action.”

The Cease and Desist Orders were issued to:

CDI launched an investigation after receiving a complaint from a consumer alleging that these unlicensed home warranty companies were marketing and selling their plans in California.

During the investigation, CDI investigators, using aliases, visited each of the companies’ websites and obtained multiple coverage quotes for California addresses. After initially receiving the quotes by emails, the companies then sent multiple follow-up emails to the investigators in attempts to sell the warranty contracts.

Consumers are advised to check the license status of a company before purchasing a policy and contact the Department at 800-927-4357 if they suspect they may be a victim of fraud.


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